Differences Between Companies and Products

January 16, 2017

The following is a brief list of some of the other factors that you will need to consider when comparing products and companies:

Company Financial Strength – Not all life insurance companies are the same. Some are very large financially, some are small. Some companies are in better financial condition than others. The longer the level premium and coverage period, the more important it is to consider how healthy and strong the life insurance company is.

Renewal Period – Most level term policies have the ability to renew the policy beyond the initial level premium period. Two products may offer identical premiums for the initial level period and yet there may be an enormous difference in renewal costs beyond the level period.

Conversion Period – Many term policies offer the ability to exchange the term policy for a whole life policy without having to again medically qualify. Should your health change, and should you not be able to buy a new policy elsewhere, you may find the conversion option important.

Comparing Different Level Periods – Should you be buying a 10 year term product or a 20 year term or Term 100, a policy which covers you for life? How long do you really need the insurance? If you buy a 10 year term, how will future cost increases after the 10th year compare to a longer level term plan such as 20 year term? If you only need insurance for 10 years, you could be wasting your money buying a 20 year term product. You should discuss why you are buying the insurance with a life insurance agent and let them give you the benefit of their knowledge and experience. The agent may be able to identify other factors you have not yet considered.

Smoking Considerations – Not all life companies define smoking the same way. If you have never smoked or used tobacco products in any way, then a non-smoking comparison will include products that you can qualify for based upon non-smoking. If you were a smoker and later quit, then how long ago that you quit may limit your choices. If you do smoke, some companies may offer products with better premiums depending on how little you smoke, or whether you smoke cigars or pipe rather than cigarettes. You will need to discuss all of this with your agent.

Finding the Best Policy

The cheapest policy isn’t always the best policy. There are other differences that you should consider before choosing the company and product that is best for you. Many of those other differences are subjective. This means that they cannot be compared by simply placing values side by side on a piece of paper, as we can do with premiums.

Note: Some companies use your actual age to calculate your premium, while others use your nearest age.