I’m coming to you today to tell you that the fine print matters when you’re buying a life insurance policy. Now, the fine print, as boring as it is, is going to determine what the policy actually does. And it will help you to know whether the policy is going to be appropriate to do the job that you want it to do. And I will give you a couple of examples.
Is Five Year Renewable Term Appropriate For Final Expense Planning
Right now, the five year renewable term seems to be kind of hot in the United States. And because I’m in the field a lot I talk with folks and I’ll ask them, “Well, why did you buy this?” They know something is not quite right but I ask them about that and they come back and say, “Well, I need something for final expenses.” I’m like, “Well, this is a five year renewable term.” And they really don’t know what it is or how it works. I will go through and show them the fine print and show them the rates go up every five years. And at age 80 or 85 or 90 or whatever it happens to be, these things usually expire all together and go away.
- Well a term plan of any kind is really not the ideal product to go with final expense because term terminates and death and taxes are permanent, so you need to make sure you have a plan that’s going to be there when you need it to be there.
So I just find that if you read the fine print, you will be able to know exactly what it is that is appropriate for you to buy to do the job.
Should I Buy My Life Insurance Online Without An Agent?
There’s another example of a product that was recently released in the United States where their big sales pitch is that there’s no agent involved. You go online and you buy it. And it’s supposed to be so convenient because there’s no agent there to mess with you or whatever the case may be. While that does sound good in some ways, at some level, it’s really not. Because if you’re not familiar with life insurance, how are you going to go into the process not knowing the questions to even ask much less what the plan will do.
- If you dig into the fine print, on this particular plan, you will find out that it’s a decreasing term plan, meaning that the face amount, what it will eventually pay goes down every single year but the premium stays the same.
And when you reach age 75, the whole thing expires and blows up and goes away. And so if you live to that age which most Americans do, you’re going to end up with no insurance, your final expenses are still not going to be covered and you’re going to have a problem at that point. It’s going to end up costing you a lot more than it would have had you bought it a lot earlier.
Good Life Insurance Agents Aren’t A Dime A Dozen
Now folks there’s nothing wrong with 5 year renewable terms. There’s nothing wrong with a product that discloses everything that it does if that’s what you choose to buy and that’s what you truly want. But you’re not going to know often times unless you dig into the fine print. And that’s my message today. I understand that you don’t want to read it. And if you don’t, and I don’t blame you, find an agent who will. If you find an agent that’s making you uncomfortable, dump that agent. Call another one. Get somebody that you can sit down with and ask questions and run the case by them, let them know what you want to do and you will get a product that’s going to be appropriate and you’re going to be a lot happier. Thanks.