insurance

6 myths about buying life insurance

Myth No. 6: It's life insurance. You can't negotiate!
Myth No. 6: It's life insurance. You can't negotiate!

Some life insurance agents cast themselves in the role of passive messenger, handing down the best offers from on high. Why? Because it works out to their financial advantage 99 percent of the time.

A dedicated pro knows how to use those best offers as a first offer and dig for even better terms on your behalf, just as they do when they negotiate with those same carriers for their own commission split.

For example, Hunt cites a technique called "blending" in which an agent will mix in some no-load or low-commission term life coverage that eventually converts to permanent insurance in order to increase the first-year surrender value of a whole life policy.

"If someone tries to sell you a full-commission $1 million policy with (zero dollars) surrender value in the first year, tell them you want at least 50 percent in the surrender column," Hunt suggests.

But Hasenauer cautions against letting negotiation turn into procrastination.

"Life insurance never gets cheaper; it's not like buying last year's iPhone. Life insurance will continually get more expensive as one ages. That's why it's important to insure now rather than later."

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