One very common question I have encountered when it comes to life insurance is “why should I pay more money if the coverage you are offering seems to be the same as the other guy’s?”
I recently saw a commercial for another life insurance company and I thought, “oh, what a clever commercial,” at least I thought so. Believe it or not, many consumers would happily pay more money for a product simply because they liked that witty commercial. That is the power of effective marketing. In reality though, when it comes to protecting the ones you love, it requires much more than witty commercials and talking animals to provide the right amount of protection as well as adequate quality of service.
So seriously, why should one not hastily choose the cheapest company? Well, consider going to a fast food restaurant and asking for 5 star treatment and a 5 star meal. You will most likely get neither of those. The staff at the fast food restaurant might be as nice as any 16 year old can be, they may forget to add ketchup, or you might even get a coke when you wanted a sprite but ultimately you will get a meal. The same is true if you go to a 5 star restaurant and ask for a Whopper Jr. They would likely give you directions to the nearest Burger King.
Similarly, when it comes to life insurance, factors that include the track record of the company, and the high level of service are just some of the reasons for variances in the cost and ultimately, the value of the product.
The policy you buy is only as good as the company that makes you that promise. A company that has a good track record and is well rated can charge you more because they have a good reputation of paying claims, not a reputation of looking for reasons not to pay claims. Insurance policies are a promise to do something for you, if a particular situation happens. Until that situation happens, all you have is a piece of paper with a promise on it. All you have is essentially an I.O.U. When a claim is potentially reported several years later, then and only then, does your family find out what it is you have actually paid for.
An equally important reason why some companies charge more for life insurance is the level of service the customer receives from the company’s staff, and their Agents. Have you ever called a company to ask about something and the person on the other end of the phone is so rude you can’t, for the life of you, understand how they still have a job? How about when you call to ask a question about something and no one in the whole company seems to have an answer for you? Does that reinforce your confidence in the company or its employees? Not likely. So you got a great deal on inexpensive life insurance, but the agents seem to have no idea about the product they previously sold you. Maybe, you don’t ever hear from them again. Perhaps they don’t review your needs periodically, as many aspects of your life may change over time. Is this low level of care worth the savings in cost? Absolutely not.
The final word is that no matter what company you choose to purchase life insurance from, make sure that you completely understand exactly what you are getting for your premiums. Know the details of the coverage, the track record of the company and also what kind of service you and your loved ones can truly expect to receive in the event of a claim. Do your research, meet with a trusted Insurance Advisor, and ensure that the product you settle on fits your overall financial plan, meets your family’s needs and offers the protection you expect that it will.