Maybe I should expand that do say the problems with money and info. There is just too much out there for one thing. The other thing is it seems most sites dealing with things financial is, well, they all seem to be focused on making money for themselves. I do get that to a degree.
How this started is when I decided to publish some articles to promote my book. Naturally, the sites I looked for were those publishing articles about life insurance. The problem I see with the articles these sites are posting is they are geared toward directing readers towards quote engines. “How much insurance should I buy?” “What’s the best life insurance company” and so on and so forth. None of them care to look to answer the real questions folks should be asking.
“What is the most important thing to consider looking for life insurance?”
“How does life insurance fit into my financial planning?”
“What should I look for in a life insurance plan?”
Look, I know these sites need to make money. I do too! But these sites are doing so at the expense of good, solid advice. For instance… “How much insurance should I buy?”
First off, yeah, sure, everyone wants to know how much they need. The fact is, “need” is relative. When it comes to life insurance, basic needs should come first and that basic need is to cover the costs of dying. Putting all the gyrations aside, $10,000 should cover this for most people. However, anyone considering buying life insurance when they should be buying it, i.e. they are young and healthy, will probably be looking at a minimum of $50,000 anyway. Children’s policies often max out at $25,000 and most can be had at $10,000. What I usually suggest is determine how much you can afford to spend and then buy as much as you can for each member with the $10,000 minimum for children being the floor. Cover the kids first, then cover the wage earners. If money is really tight, reverse the order.
For those making really good money, the 10x annual income can be used as a goal while buying the maximum for the kids. Beyond this is the higher end crowd where the life insurance needs enters the more complex estate planning territory. Most of us will never need worry about all that. For those that do, find a top insurance agent but by all means do stick with mutual insurers!
As for those financial websites, can you see where all this will lead? The word “lead” is apropos here because most of these articles are geared towards providing leads for insurance agents. While there is nothing wrong with this at face value, insurance agents as a group are trained to sell insurance rather than guide a prospect to the correct buying decision. How do I know? I’ve been there. Here’s a likely scenario:
An agent gets a lead. Somebody say’s they are interested in buying life insurance. Great! Depending on how that lead is generated, it may be a top notch lead or something less. Let’s go with top notch here. So the agent starts off qualifying the prospect financially. We aren’t being nosey, but we need to get an idea of the level of insurance coverage you’ll need. Most will also ask about the family, however the focus is on Mr. Prospect, even though we learn Mrs. Prospect and the two little Prospects are not covered. Then the agent qualifies Mr. Prospect medically. Now the agent determines the best plan for Mr. Prospect. It’s a great plan, really. It hits all the needs of Mr. Prospect. Assuming he has excellent health, a quote is offered. It looks good so the application is began and submitted for processing. What’s wrong with that?
Mrs. Prospect and the two little Prospects are still not covered! Worse, the agent oversold the policy by offering options that, while certainly desirable and valuable, were, well… optional. Now there is no money in the budget for the rest of the family. The agent didn’t do anything “wrong”. S/he did what they were taught – qualify, qualify, present and close. That is the pattern for all insurance sales. Why? Because it works! Not only that but who can argue? The policy is in line with Mr. Prospect’s needs. He can afford it. And he qualifies medically. It’s all good, except it’s not. You see, next year, the youngest Prospect gets sick. It’s not fatal but chronic and now she cannot qualify for most insurance programs. Ever. The same could happen to Mrs. Prospect or one or more of the family could be involved in a traffic accident that leaves them uninsurable. Even if none of this happens, how long will they go without life insurance?
Can you see where I’m pulling my last two hairs out? Add to that the recent article stating why women don’t buy life insurance. In a nutshell the article says they don’t feel confident they understand life insurance enough to make a good decision and they don’t know how much to buy. Those “articles” I’ve seen online on “How much insurance do you need?” are all lead generation articles. Why? Because until someone is properly qualified all life insurance quotes are useless. And every article I’ve seen links to one online quote engine or another. If my statement in bold holds true than it follows those articles are equally useless. What about the rest of the articles on these sites? I won’t brand them all useless. In fact, you’ll find loads of good information on most of them. The caveat here is you need to step back and consider whether the information is truly useful to you or if it is designed to take some action or another. Then you need to decide if the action is reasonable.
Look, I’ll be the first to admit it, I want my readers to buy my book. Why? Because I am convinced it is the most concise guide to sanely buying life insurance available today. Of course, I am biased, but if I cannot offer the best value around, I’ll take the book off the market, close up shop and write a novel. My point is, I don’t feel it is a bad thing to publish an article that spurs you to action – as long as the action is reasonable. It is reasonable to spend a few bucks for a blueprint enabling you to properly secure protection for you and your family. In some cases, it is reasonable to obtain a life insurance quote. What cases are those? When said life insurance appears to fit your current needs. That said, I should warn you, it is always wise to compare at least three quotes and you really should talk to each agent and explore your needs and that solution you are considering.
In conclusion, while financial sites do provide a valuable service and often good information, you should peruse them with caution. If you get the feeling all they want is to steer you to one paid service or another, then you should proceed with caution. This doesn’t invalidate their information but your decisions will be more sound once you recognize and account for their inherent bias. More often than not, most of us are likely to be bombarded with too much information rather than not enough. At that point we need to filter out what is tangential or irrelevant so our decisions are based on solid knowledge that directly pertains to whatever solution we are seeking.
My Shameless Plug
Speaking of filters – Life Insurance “Dirty Little Secrets” for Consumers Revealed! acts as an excellent filter for anyone looking to buy life insurance. It is a concise volume that strips away tons of information to get you to the meat of the issue. What do most people need? How much? What to look for and how to get it. You’ll also be briefed on the various kinds of life insurance as well as the common and popular options so you can quickly and easily decide what will work for you. Be forewarned, I strongly believe most readers will derive the greatest benefit from one type of policy from one type of insurance company. In such cases the only real question that remains is… how much? I provide a simple way to make that decision also. In short, if you think you might need life insurance, this book save you time and money while providing the solid information you need to make an informed decision.