Picking a Life Insurance Insurance Policy: 4 Smart Buying Tactics

Life insurance is one of those financial necessities – the type of personal investment that most of us consider essential to a stable, secure, and reliable life. It protects us from unforeseen consequences, bringing financial security in even the most dire circumstances. It also allows us to sleep reassured that our family, loved ones, and dependants are safe and financially healthy should anything occur.

However, while most of us have been reminded of the importance of life insurance, few have been adequately informed about just how to purchase it. There's a growing community of people that are convinced these skills – smart buying, credit and loan management, and basic finance – should be a key component of education. Given the lack of awareness in buying loans and long-term insurance policies amongst young adults, they're growing rapidly in number and sharply in influence.

These four smart buying tactics can help you find, compare, and decide on a life insurance policy without tripping over details or misleading claims. They can bring clarity to a search that's often a source of endless frustration. If you feel lost, confused, or manipulated when buying an insurance policy, come back to these tactics and calculate how they could help you find a better deal.

1. There's no shortage of selection, so don't feel compelled to buy now.

You're sitting in an insurance salesperson's office, counting down the seconds before you feel compelled to sign the contract. It's a situation that almost every life insurance shopper has found themselves in, but it's by no means the way in which you need to close on a contract.

Insurance reps are trained to sell – it's their job, and it's their financial bread and butter. When you're inside their office, leaning in to hear their pitch, it's easy to forget that there are other insurers out there. Don't feel compelled to sign, simply because you've been given a lengthy sales pitch.

2. The term 'life' isn't as obvious as you might think.

From term policies to lifelong coverage, the life insurance world isn't one that's dominated by strict and literal definitions. Lifelong (also referred to as 'whole life') coverage will often end before your death, potentially leaving your family and loved ones unable to claim on your insurance.

Similarly, term insurance policies can suffer from manipulative wording and deceptive descriptions, most of which are used to push people into signing up for plans that don't suit them. Don't ever take a life insurance policy at face value – read it carefully and work out what the rules really mean.

3. Insurance reps are trained to close. You close them, or they close you.

There's only one rule of selling insurance: close. When you're pitched to by an insurance rep or life insurance salesperson, understand that they will do anything in their power to increase your interest in the product. It's a classic sales trick, and it can take newbie insurance shoppers off guard.

How should you respond? Close them instead. Pitch them on why you can't get their product, what's stopping you from buying it, and what factors you're pushed away by. The best case scenario is that the agent listens and changes the policy; the worst is that you can walk away to find another insurer.

4. Manipulating agents and insurance policies will cause future problems.

Have you ever played with an insurance policy calculator, purely to test how different conditions and factors change your premiums? Most insurance buyers have, and many have found that even the smallest medical conditions can result in a drastic rate and premium payment increase.

It's tempting, then, to lie about medical conditions and hide information from your insurer. Please don't fall into this trap. Insurance companies will follow up on your claim and they will do research, which can often prevent your family from receiving compensation when something goes wrong.