AboutDave Bowman Expertise I will answer questions of a general nature regarding life insurance, disability income insurance annuities (fixed and variable) and long term care insurance. Also, questions regarding estate analysis. No legal or accounting advice, as I am not a lawyer or a CPA. I do not sell health insurance, so have limited knowledge of the current status of that field.
Experience
Past/Present clients Families, professionals, small businesses, individuals.
Expert: Dave Bowman Date: 7/13/2008 Subject: life insurance
Question i have always had life insurance, but have been unclear as to how they work. If for instance i should pass, then whatever the amount the policy is for, a check for that amount will go to my beneficiary? what if i pass of natural causes at old age, is there still a check?
Also i would like to get more life insurance so if you can direct me to some legitimate companies, i would greatly appreciate it.
Answer Life insurance pays a "death benefit" on the death of an insured person. In most cases, it does not matter how or when you die, as long as the policy has been issued and has remained in force up to the time of death.
As for a reputable company, there are very many. The state you live in regulates the insurance companies that do business in your state. The reserving requirements, underwriting standards, methods of settlement,etc. must be pre-approved by the state.
You can get a rating on the solvency and financial strength of an insurance company at: www.ambest.com A.M. Best may charge a fee for a rating on an insurance company. If you want to know the A.M. Best rating on a company, you can usually just ask the company, by calling them or e-mailing them.
With that said, there are several steps to buying life insurance. First, determing how much you need; second, deciding how much you can afford to pay, and lastly finding a policy that meets the first two criteria. A final step is to medically qualify for the policy. That is called underwriting.
For the do it yourselfer, www.lifehappens.org is a good site to visit to learn more about needs analysis and types of coverage available. Still, it's a very wide industry, and it helps to have professional guidance. Since most agents work by commission, you can utilize the services of a good one without having to pay more for your policy. Look for an experienced agent that is a member of NAIFA (National Association of Insurance and Financial Advisors), and has a designation such as CLU or ChFC, or is working on such a designation. A CFP also may be a good source as he/she understands the need development process. However, such an individual may not have a lot of experience in life insurance specifically.
I trust that this discussion helps you in your quest for more information and more life insurance.
