How to Buy Life Insurance Policy Wisely Without A Broker In Nigeria
Life insurance policy is necessary for unexpected issues. You can buy life insurance policy directly from the insurance companies or you can use a broker to buy the insurance. This could prove to be the better option but it has downsides.
Some of the downsides of using brokers to buy life insurance policy are as follows.
Their commission comes first
Whatever you might think of insurance brokers, the truth is that they want to help you help themselves because they are paid on commission, based on the sales they make. The problem here is that most of them are much more interested in raising their commissions than getting you the best insurance policy.
They sell you what you don’t need
In order to increase their earnings, insurance agents try to sell you policies you don’t need and they can be very convincing such that you wouldn’t have a choice but to comply.
It costs you more money
Buying insurance through a broker may also cost you more money than buying insurance yourself. This is true because you are also paying part of their commission.
You could be defrauded
You may run into the hands of unscrupulous insurance agents who would rip you off if you are not careful enough.
As a result of the downsides involved in buying a life insurance policy, we advise that you take up the option of buying the policy yourself. Here are few tips on how you can buy a life insurance policy without a broker.
How to Buy Life Insurance policy Without an Agent or a Broker
Determine your life insurance needs
The first step to take if you want to buy life policy is to take your time and decide on whether you need to buy life insurance policy or not. You should also decide how much insurance policy you need if your answer is on the positive side.
When you have family and people that depend on you, you wouldn’t want them suffering when you are gone. This is why you need to buy life insurance policy. I’m sure you want your family to continue the standard of life they had before you died. If so, you need a policy or coverage for that.
More importantly, you can benefit from the insurance company’s cash build up in the event that you go broke before you die.
Below are some the things you need to consider to enable you decide or determine if you need to buy life insurance policy.
- Calculate how much money you spend every year. The amount you spend on household expenses such as feeding, clothing, education, maintenance, taxes, rents and other bills.
- After the expenditure, calculate your income. How much money is coming in. All of it. Salaries, benefits and returns on investments are all to be factored in.
- Add up existing debts if there are any.
- Factor in all the major expenditure that will be made in the future even when you are no longer part of that future.
When you have finalized all of these, you should add up the expenses, the debts and the projected future expenses and remove the figure from the amount of debts you currently owe; this gives you an idea of how much life insurance coverage you need to buy. Remove the value of your assets to further reduce the amount the life insurance you to buy.
Determine your life expectancy rate
What is your life expectancy man? Are some of your everyday attitudes and lifestyle having a negative impact on your life expectancy? Insurance companies use your life expectancy rates to determine how much life insurance you need to buy.
Life expectancy simply refers to an estimation of how long you are expected to remain alive when some considerations are factored in. Some of these factors include-:
- Eating habits
- Smoking habits
- Exercise and Sporting
- Nature of job
- Driving habits and skills
- Alcohol and drug use
The factors above have the capacity to either increase or decrease your life expectancy.
Decide on whether you want Return of Premium Riders. You should need them
When you want to buy life insurance policy, it is advisable that you decide on whether you need premium riders. They are the guys that will help you get your money back if you outlive you insurance policy.
Know the different types of life insurance
To be able to choose wisely when you want to buy a life insurance policy, you have to learn about the different types of life insurance policies and their benefits they offer. Below are the common types:
Term Life Insurance
This type of life insurance policy does not offer a cash value build-up. It however, offers protection for a specified period of time. The good thing is that the premium rates are lower than other types of life insurance policies.
Whole life insurance.
This type of insurance is designed to cover and protect its holder throughout his life time. There is a price though. The premiums would continue to be paid all through the lifetime of the policyholder. It expires only after the death of the policyholder.
Endowment Insurance Policies.
Here, the policyholder insures his life ad pays premiums for a specified period of time. If death occurs during agreed insured term, the beneficiaries would get the assured sum. On the other hand, if death doesn’t come, the policyholder gets back his premiums along with some other investment benefits.
Ask for insurance quotes
When you have decided on the type of life insurance policy that you want, the next step would be to ask for insurance quotes. Since you do not want to use an agent or a broker, you would have to approach the insurance company yourself.
Ensure that you use only reputable insurance companies. It doesn’t have to be the biggest insurance company as smaller companies offers good deals too but big or small; ensure that you review the terms, conditions, premium rates and customer reviews well before you buy a life insurance policy. You could also ask for quotes and compare rates on the internet.