Hello, everyone! Welcome to my Personal Insurance Information Series.  This series is designed to give you the basic knowledge you need to make informed decisions when purchasing personal insurance.

Heather

Find A Licensed Insurance Representative

The most important thing that you should know about buying personal insurance is that it must be sold by a licensed insurance representative.

Get A Thorough Needs Analysis

Your licensed insurance representative must meet with you and do a needs analysis of your situation before they can accurately recommend any insurance products for you

A needs analysis should include:

  • what is important to you
  • a review of your finances
  • the needs of your family
  • up-coming life changes

If an insurance rep approaches you and tries to sell you insurance without thoroughly reviewing your situation, they are more focused on what they want to sell than on what you need.  

The first step in getting good insurance is finding a good representative. Don’t hesitate to visit a few different agents and choose the one that feels best. Do not feel pressured into accepting a recommendation immediately, as it can require some thought and consideration.

Pay Attention To Policy Guarantees

After an insurance rep does a thorough needs analysis and counsels you on your best coverage options, they will submit your insurance application to the insurance company.

Underwriting is the process that an insurance company performs to determine whether they will approve you for insurance or not.  It is based on detailed information provided to them by your insurance representative. With guaranteed policies, the underwriting process is done before issuing a policy. 

Beware of policies that ask only a few simple questions in their applications. These policies are usually not guaranteed. When you make a claim against the policy, the company then reviews your eligibility in more detail. You may be denied.

Always ask about the underwriting process for each application you submit. Make sure that you know whether or not your policy is guaranteed!

Don’t Put Your Insurance Off Until Later

Take the time to do your research and find a good agent before purchasing personal insurance. That being said, don’t put it off for too long! Nobody likes to think about it, but you never know when you could get injured or die.

You also never know when you will become uninsurable. This means that you’ve had a life event or health condition that would cause an underwriter to deny your application for a policy.

Even young people can encounter life events that make them uninsurable. One 20-year-old lady I counseled was denied life insurance coverage because of complications during a previous pregnancy.

It is best to get your personal insurances established early in life. You can always upgrade your coverage as you mature and become more successful.

The second article in this series gives an overview of the different types of personal insurances that you can buy.