Following Family Advice - Life Insurance

[Doug Betts]

After spending 30 minutes assessing this prospective client's needs we determined she in fact needed life insurance we also determined the amount of coverage necessary. That was a non issue but as the saying goes, "you can lead a horse to water..."

I was given the old familiar line. "I want to talk it over with my daughters before making a commitment." I find absolutely nothing wrong with individuals wishing to discuss important life decisions with loved ones. As a matter of fact I encourage it. The problem comes with individuals who offer bad advice to family and loved ones based on very little research. Your children may love you, your spouse may love you, your mom and dad may love you. They also may give you lousy advice on what coverage is best for you. Too many individuals believe themselves to be insurance experts when they are not. They read an article or two on the internet, (or even worse) and feel they are qualified to advise friends and family. By not understanding the basics of insurance, (non-forfeiture rights, term periods, etc.) the most well intentioned individuals could create tremendous hardships for the people they love by what they say.

CHEAP IS NOT ALWAYS BEST. Too many people make important decisions on coverage based solely on premium rates. This has often been the biggest mistake most people make with their insurance selection. Listen, would you buy the cheapest car on the lot? Or how about the cheapest diamond at the jeweler? Would you trust a dentist who told you, "I have the cheapest prices in town?" The question is why would you do that with something so important as life insurance?

Well to wrap this story up my prospect did that very thing. She went with coverage through an association because as she put it, "It's cheaper, and my daughters told me it was the best." Unfortunately neither she nor her daughters read the details of the plan. Although it was "cheaper" her policy coverage ended at age 80. So if she lived to be 81 tough luck, no insurance! Also, she would forfeit coverage should her membership with the association terminate at anytime. Well you get what you pay for I guess. As important as it is to get sound advice when preparing your taxes, having surgery, or buying a home it is equally important to speak with professionals regarding your insurance. "You don't think so???" Well try dealing with the headaches and stress of finding out your policy doesen't perform as you thought it would at the time you need it most.