There’s a considerable amount of factors when choosing the right insurance company. Price is may lie right on top of the list, but there’s more to the puzzle than selecting the company with the lowest premiums. Other important factors to keep in mind when choosing the right life insurance company include:
The products offered
Does the company offer a broad scale of policies? Many insurance companies focus on specific niche products, such as Long Term Care, while others have a mandate to have a complete and competitive product lineup. If you’re working with an independent broker, it may be in your best interest to insure yourself with multiple companies.
Financial stability
Life insurance in Canada is a pretty long-term commitment, therefore you want to make sure the company is stable. You can verify the insurance company’s financial stability by gathering data from rating services such as AM Best (www.ambest.com). This becomes crucial if the policy exceeds $200,000, the maximum death benefit amount covered by Assuris (formerly Compcorp). This company protects Canadian life insurance policyholders against loss of benefits due to financial failure of a member company.
Claims
What kind of claims service does the company promise? How have existing clients been treated during the claims process? You may want to check with a national claims database to see if there are any major customer complaints on the company.
Where does the insurance company find itself in its business cycle?
Some life insurance companies go through phases where they are actively pursuing new business, which may be reflected in the company’s premiums and the degree to which they are accepting new business. This is where an experienced independent broker, who is in tune with the marketplace, can save you a small fortune over the life of your policy. Insurance companies often have differing guidelines on their acceptance protocols for various illnesses. If you find a company at a key stage in their business cycle, it can mean the difference between qualifying or being declined for insurance.
Does the company employ an independent sales force?
Some insurance companies have only in-house sales force, meaning their agents are only allowed to propagate the company‘s products. This often skews the agent’s advice, as he/she cannot offer an unbiased opinion. Insurance companies who use the independent brokerage channel create a level playing field and provide less biased advice to the consumer, allowing their sales force effort to be in the client’s best interest.
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