By definition insurance is something you hope you’ll never need. If you do need it, however, then the value of a good policy, backed by a good insurer, becomes obvious. This is particularly true of life insurance where claims are made as a result of a bereavement. There are three key points to look for when trying to identify the best life insurers.
Small can be beautiful as long as it’s backed by strength. Put quite simply in the event of making a claim, you want to be sure that having taken your premiums, your insurer will actually pay and pay reasonably promptly. This is important for any claim and all the more so if you would like some or all of your benefit to be paid as longer-term income rather than as a lump sum.
It’s also worth understanding a company’s pedigree. Has it been spun off from or absorbed by a larger company? How long has it been in business overall and how happy are its shareholders/investors. In short, you should expect an insurance company to demonstrate the sort of good money management you apply to the family finances. If this sounds complicated, then an experienced financial adviser will be familiar with companies as well as products and will be able to point you in the right direction.
Flexibility And Diversity
Although all life insurance essentially boils down to a choice of an open-ended life policy or a term-assurance policy, there are a variety of other options available to tailor them to suit. These include guaranteed rates (keeping your premiums the same over the whole term/lifetime of policy). The ability to vary terms can also be useful. It allows you to adapt your policy to your changing needs without having to start again from scratch. Likewise the ability to vary the sum insured can be helpful, for example it can be reduced in stages as a mortgage is paid off. This can reduce the level of payments and allow funds to be diverted to other areas of a financial plan.
Two little words which can make a world of difference. Customer service isn’t just about being polite and helpful when you’re making a claim (although they certainly helps). There are some more concrete points to check. First of all, how quickly do they make a decision and offer a price? For people with very specialist requirements there may be a need for an insurer to take some time out to check if cover can be provided and if so how much it will cost.
For most people however, companies should be prepared to give a prompt answer along with a price. Once a decision has been made, do they offer cover during the underwriting process? This is a fairly standard option, but it is not universal so it pays to check as the process can be quite lengthy. Do they offer annual statements? These can be a very convenient reminder to double-check that your cover is still appropriate for your needs. Do they have a telephone number? If so how helpful are their agents? If not, what contact options do they have and how efficiently do they work?