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Friday, 29 December 2006

Shopping online for life insurance

Most financial planners will advise that you take out life, disability and possibly other insurances, or increase the amount of cover you already have. This is often good advice, as there is a larger chance of fit, young people suffering time off work (possibly indefinitely) at some stage of their working lives than many people realise, and this can have a devastating impact on your personal finances if you do not have adequate cover. Personally, I have $400K of life and TPD cover, as well as loss of income insurance (with a 12 month waiting period to reduce the cost). While it would probably not be needed if I died, as my net worth would provide a reasonable estate for my family, it would definitely be required if I suffered TPD or could not work as long as I've planned. Sudden ill health can affect any of us unexpectedly, so this is an area where it doesn't make sense to be too frugal. While you can often "self insure" and save the expense of some types of insurance - for instance comprehensive insurance on a vehicle is usually a poor "investment" once a car is several years old, it isn't possible to "self insure" for big ticket items like life insurance.

If you're shopping for insurance via a financial planner, just bear in mind that the fees generated for the planner are generally very large, and could influence their recommendations. While they often argue that "value" is more important that "cost", and it *is* very important to check all the conditions and exclusions when comparing insurance, the cost of very similar insurance products can vary considerably.

If you wish to get an idea of what the amount of insurance you have in mind would cost, you can get a lot of information online - for example, online quotes are available from financialone.com. Like most online quote providers, you have to provide your personal details in order to get a quote, so you should expect some follow up sales pitch.

If you just want some more info on life insurance, there are also some life insurance articles available, which cover topics such as:
* Smoker's Life Insurance
* Non-Smoker's Life Insurance
* Accidental Death and Dismemberment
* Waiver of Premium
* Senior's Life Insurance
* Pension Maximization
* Split Dollar Life Insurance
* Term Life Insurnace
* Irrevocable Trust Using Life Insurance
* Life Insurance for women
* Life insurance for Diabetics
* Keyman Insurance
* Life Insurance Premium Financing

Unfortunately, the trend towards rebate of up front fees for investing in mutual funds via discount brokers and fee-only financial planners doesn't seem to have spread to the insurance area of personal finances. Although it wouldn't hurt to ask your fee-only finacial planner (if you have one) for a rebate of some of the first year's insurance premium "kick back" and the trailing fees.

Financialone.com also provides a listing of the insurers that are used for their online quotations, so you can check if a particular insurer you are interested in will be included in their quotation search.

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