At present, about 1,000 companies sell life insurance in this country. However, most of them sell their products and services through about 300 groups so they can simplify their product distribution and pay more attention to each states legal policy requirements. Talking to a MN life insurance lawyer is a good start.
(Before buying any life insurance policy, always start by checking on the companys licensing status. You can do this by calling the Minnesota Department of Commerce at 651-539-1600 or 1-800-657-3602.)
Once youve made this initial phone call, youll still need to look into each of the following issues about each company that interests you before signing any contracts or making an initial payment.
Tips for Choosing the Best Life Insurance Policy to Meet Your Personal Needs
- Make sure the company you prefer is authorized to do business in Minnesota. You can check on its licensing status by calling one the phone numbers provided above. Should the company go bankrupt or if other problems arise, our states insurance department can help you pursue any funds or deposits owed to you through Minnesotas life insurance guaranty fund;
- Visit your local library to check on ratings and rankings. Be sure to inquire about each companys national ranking and financial rating. If theres a reference librarian, s/he may be able to provide this information to you over the phone;
- Before researching any company, be sure to write down its name correctly. Far too many companies often use nearly identical words in their names. For example, they often try to use words that can convey strength or financial knowledge such as: reserve, security, guaranty, bankers, and investors. Companies will also try to impress you with the geographical reach of their services by adding words like national or continental to their names;
- Carefully inquire about all special policy features available to you now and in the future — before buying anything. When youre too trusting and fail to do careful research in advance, you may later find out that the special provisions you wanted most are just not available;
- Look for a company that has high consumer ratings and has a positive and lengthy track record. Remember what weve all witnessed during the past 10 years far too many seemingly successful and solvent companies can quickly come and go. If a company has been around a long time, provides a number of special policies, and employs respectful agents, chances are its legitimate. Always check to see if your local branch of the company is listed with the Better Business Bureau — and has earned a good rating. Conversely, if agents come and go often chances are there may be some serious financial problems tied to this turnover. You can always leave and search for a better policy after seeking advice about the wisdom of changing companies from your attorney and other trustworthy professional consultants;
- Request a written copy of all premium amounts and other possible fees being quoted to you. If you fail to do this, you may soon receive a bill for far more than you ever agreed to pay;
- Always provide your company with accurate health information. When you fail to do this, you can actually prevent your named beneficiaries from being able to collect and money under the policy when you die and answer probate related issues;
- Ask for a printed chart or list that clearly indicates all expected fluctuations in price expected during your lifetime. If youre told rates can change be sure you know about each and every factor that can affect such changes. Also, make sure the company has promised to provide you with ample notice before any rates hikes go into effect;
- Do all you can to research the consumer complaints filed against each company that interests you. You can start this research by calling one of the phone numbers referenced at the beginning of this article;
- Make sure you fully understand the difference between term life and whole life insurance policies. For example, if you outlive a term life policy, your named beneficiaries cannot recover any benefits. Likewise, you can normally only build up cash (or equity) you can borrow against with a whole life insurance policy. Ask your Minnesota estate planning attorney and insurance agent for more information about these two types of policies;
- The MN Department of Commerce also recommends that you ask how fast the policys cash value grows. Be sure to see if the growth rate changes in later years);
- Finally, after youve conducted extensive research on each company and before you sign any contract or make a payment Stop, Call, and Confirm. Our MN Department of Commerce says that if you havent already made this phone call do so now. You can reach our states Division of Insurance at either: 651-539-1600 OR 1-800-657-3602.
You may also want to download the National Association of Insurance Commissioners guide to buying life insurance. Once youve had a chance to review that guide, you should schedule an appointment with your Minnesota estate planning attorney to be sure that the policy youre most interested in buying will fit well into your overall estate plan.
MinnesotaLife Insurance Lawyer
Contact the Flanders Law Firm today. The firm offers free estate planning consultations to all potential clients. Call (612) 424-0398.
