Comparing Life Insurance Policies: Focusing On What Really Matters

Almost everybody has heard of life insurance, and many of us have more than a passing acquaintance with this type of insurance. But how well do you understand the differences between one policy and the next or one insurer and the next? Are you equipped to compare life insurance policies effectively, or do you need to do your homework first? If you need to catch up fast, please feel free to use the preparatory notes on life insurance comparisons that we've jotted down for you.

Stick to the Basics

The numerous combinations of policy options available today can make life insurance comparisons somewhat more arduous than they need to be unless you're clued up. If you're not sure what you're doing, it's very easy to get distracted by additional coverage options and unique features offered by individual insurers. But no matter how many new coverage options are introduced or how many bonus features each insurer adds to their policies, focusing on the fundamentals will always yield the best results in life insurance comparisons.

• Benefit Size - The amount of money payable to your beneficiaries in the event of your death is probably the single most important aspect to focus on when making comparisons.

• Speed of Payout - Coming a very close second is the length of time it takes your insurer to honour their commitments.

• Policy Term - The number of years for which you are covered is another important policy term that should be included in your calculations when making a life insurance comparison.

• Premiums - How much your life insurance coverage costs is, of course, of prime importance when making comparisons.

There may be many other important policy features to consider, but these are the fundamental ones on which you must focus when making direct comparisons.

Studying the Fine Print: Crucial Terms & Conditions

In addition to the fundamental considerations we've already covered, you should also be aware of some key areas to look out for when working your way through the terms and conditions of each policy you compare.

• Exclusions - There may be exclusions for pre-existing conditions or certain causes of death, which you need to pay close attention to when performing each comparison.

• Ability to Increase Benefits - Some insurance companies make it easy for their clients to increase (or decrease) benefit levels as their needs change. Others may be less flexible in their approach.

• Future Insurability - Life insurance policies with a clause guaranteeing future insurability are worthy of special consideration.

Don't forget to check the relevant areas carefully and to make a note of any questions you may have for the insurers that provided the quotations.

In the Final Analysis: Making Your Choice

In most cases, simply judging each policy using the criteria provided in this article will be sufficient for an individual to identify the best one for his or her needs. However, if you have any special needs that are unique to your situation, you must remember to take these into consideration as well.