Reviewing our Insurance with Agent

[familyof4]

I am sorry if this thread is a duplicate, but I have searched and did not find what I was looking for...

Anyway, I am meeting with my Insurance agent for Auto, Home.

We have term Life insurance now and will be discussing whole options.

But my main concern is that we have the liabilites and replacements set correctly.

Any tips to ask or be sure that is covered? We live in Pennsylvania.

[graceful]

Unless you have a special needs child, family history of illness, or other special situation that would necessitate whole life, I would investigate getting a NEW term life. Costa may have gone down and you can either get a policy for less money than you are paying now or for more coverage for a little more money.

For example, you purchased a 20 year term 8 years ago for $500K coverage and your annual premium is $700. (made up numbers) Your term life runs out in 12 more years. Today you can buy a totally new 20 year policy for $500K coverage for $600. Almost the same but you lock in that rate for a new total of 20 years instead of the 12 years you had remaining on your old policy and you are paying less. These are all made up numbers.

Ask for ALL the numbers, new term and whole life and then make your decision. I have a feeling term will be cheaper.

However, you know your health and family medical history better and about your financial situation to make a decision that will help you sleep better at night. Just make sure that the insurance agent isn't painting you a fake dream picture though. LOL.

[Runaway Finances]

You seem to be asking more about the home and auto. That is really tough to answer here without A LOT of info. Your agent is who should be able to tell you best what to do. Make sure the agent is good. Get references and talk to his/her clients. Make sure the agent does a review with you every year. Many do not. They just collect premiums.

You might want to consider an "Umbrella Liability" policy. Talk to the agent about it. If so, make sure the underlying limits of liability on the Auto and home policies are the minimums required by the Umbrella policy. I've seen where the agent has the liability coverages on the auto and home too high so you are essentially double covered.

Auto: compare premiums on various deductibles. You can save a lot by having higher deductibles, but at some point it doesn't make sense to go higher. If you have good health insurance, then I would opt out of "Personal Injury Protection". Passengers will be covered under your liability coverages. If you have "Comprehensive" then you do not need "Uninsured Motorist Property Damage" in my opinion. Ask if they offer multicar discounts, Good grades discounts (kids), discounts if you have home insurance with you. State Farm has several of these kinds of discounts.

Home: same on the deductibles. Check the differences in premiums. Ask about how jewelry and guns (and the like) are covered. You may need a separate "Personal Articles Floater". Don't insurance your house for what you can sell it for. Insure it for what you can replace it for. Ask about your state's law or the insurance company's rule regarding a claim if you don't insure your house for enough value. In other words, if your house's replacement value is $200,000 and you insure it for $150,000, then you are only insured to 75% of the value so they only will pay 75% of loss. Check what the rules are in your state. If you have a 40 year old house you might get a discount if you have updated your AC/Heat system, Electric Service panel. You may be eligible for a discount if you have a certain kind of roof. Check out water damage coverage and mold. Some policies do not cover this or offer huge discounts if you waive the coverage.

Hope that helps.

[familyof4]

Thanks.. I will need to get a complete statement of what I have covered on the Home and Auto and go over it very carefully. for some reason I know I am covered enough, but feel like there is always something that will be over-looked.

[creditcardfree]

I would avoid whole life insurance. It is very expensive.

I would also look at increasing your deductibles on home and auto, if you have an emergency fund that could cover the increased deductible if something sould happen. Your premiums will go down...you can save the difference or use it to pay down debt.

[FrugalFish]

I reviewed our policies a few months back. Liability limits were based on net worth- i.e. what do you have to lose? If you are concerned and want to do a little research before speaking with your agent (I did), look online for calculator that helps you figure out what kind, and how much, insurance you need. Many insurance sites have them, and you don't have to put in any information that will allow them to contact you in order to get the results. Going over that made me feel a little better before I called and bombarded the agent with other, more specific, questions.

[Runaway Finances]

It is frustrating when people make the statement that whole life is very expensive. I'm no longer in the insurance business so I have nothing to gain here, but there is a purpose for Term insurance and a purpose for whole life or universal life insurance. Whole life is expensive initially as compared to term, but if you need insurance for more than 10 years, I can almost guarantee you that whole life/universal life will be less expensive in the end. Term gets really expensive after its initial guarantee period unless you are healthy and can re-apply. Life insurance is complicated and you need a QUALIFIED agent to tell you what is the best policy(s) you need to meet your needs. No one policy is right for all people and all situations. You can't always trust the proposals. You need to be able to analyze them to make sure the assumptions are correct and the values seem reasonable. The normal person can't do that easily, but a good agent can. One time, I got a proposal that the numbers didn't make sense. I contacted the actuary at the company and he said I was right and that the system should not have generated that proposal. The most important part of buying life insurance is to find a really good agent that has been in the business a long time.