These days, insurance scams run rampant.
Consumers are being taken advantage of on a daily basis.
It is important that they obtain the knowledge to prevent against these scams.
Consulting an insurance calculator is a great place to start.
An insurance calculator can be your first line of defense, even before you research policies.
They will tell you exactly how much you should be spending for your potential policy.
This way, you will not spend a single dime more than you had initially planned.
An insurance calculator computes your projected payments by factoring in all of your expenditures.
They also factor in variable life circumstances.
Being aware of your projected payments before you seek a quote from an insurance agent is crucial.
You will know you are being scammed if the amount you are quoted is much higher than you calculated.
Why Life Insurance Is Necessary
There are some who would argue that life insurance is a luxury, not a necessity.
For lower-income families, it may be very difficult to afford life insurance.
The benefits of purchasing life insurance are not felt immediately.
So a lot of families don’t bother.
But when tragedy strikes, these families are left in a terrible position.
According to the Federal Trade Commission, some funerals can include costs that are as much as $10,000.
This cost depends on many different factors.
Regardless, funerals are known to be extremely expensive.
Medical costs associated with the death of a loved one can also be very high.
Sometimes, these costs can be high enough to financially destabilize a family.
This can be especially true if the family member’s death involves long-term care or a lawsuit.
Life insurance works as a safety net for families.
If the main earner in a household passes away, a family can still be relatively secure if they are the beneficiaries of a life insurance policy.
This allows some of the burden to be lifted off the families who are already hurting.
In short, adequate life insurance can cover costs associated with death.
But a good policy can also help supplement a families’ income.
Losing a substantial source of income can cripple a family.
Life insurance can fill the void of that income source while also alleviating some stress associated with having to potentially become a single-income household.
How Scammers Can Hurt You
If you’re not careful, insurance scammers can undermine the security and safety that a life insurance policy grants.
Scammers tend to prey on certain vulnerable populations.
These populations include the elderly, the poor, and immigrant groups.
But anyone can be the victim of an insurance scam.
There are certain things to look out for when you are in the market for an insurance policy.
Never let someone take out a life insurance policy under your name.
There has been a history of people doing this in exchange for money.
However, this practice is illegal in many states.
Situations like this, although they might seem enticing, can end up costing you.
Especially when compared to a legitimate policy from a reputable firm.
Also, an insurance company or agent can sometimes make you pay a lot more for your policy than you should be.
They do this by stating on an application that you actually earn more than you do.
This results in higher commissions for them, and a much higher regular payment for you.
Unethical practices like this may have been a factor in life insurance having a middling reputation.
Make sure you double check your insurance application before agreeing to anything.
There are also cases of illegitimate insurance providers offering life insurance at a very low cost, sometimes for no cost.
Don’t fall for these scams.
There is no way any reputable insurance company can offer you a policy without collecting a commission.
If you sign up for one of these policies, you may be implicated in something illegal.
You should also never fall for any scams that involve income after retirement.
Setting yourself up for retirement is responsible, but you may not see returns on your investment for many years.
Make sure you sign up for an investment plan that allows you to withdraw money after retirement without being penalized.
Generally, if an insurance agent or company tries to sell you a very pricey policy, you should use your best judgment.
The reality is that some insurance operatives will not be looking out for you.
They will put their sales earnings first, while potentially putting you in a financial hole.
Read the fine print.
When meeting with an insurance representative, be extremely thorough.
What they are telling you may not necessarily be the truth.
Be vigilant, and make sure you are aware of your options.
You should be able to clearly determine which policy works best for you and your family.
Preventing Potential Scams
Depending on your lifestyle, your payments can fluctuate.
Understand the value of your chosen policy and make sure your payments reflect your degree of coverage.
Always get a second opinion.
If you are getting a quote from one provider that seems too high, consult another provider.
Comparing the prices will let know you if you are getting ripped off.
Establishing a relationship with a provider can also be beneficial.
If you know them well, you are more likely to get a fair deal.
But if you’ve never had insurance before, seek the advice of friends and family.
They may be able to recommend an honest agent who has treated them right in the past.
As always, you should make sure they have a license before engaging in any business.
Also, keep detailed records of every transaction and deal you are involved with through your agent.
Always make traceable payments, never pay cash.
This can be very important in the event of a lawsuit.
If your insurance company cannot provide you with any receipts, they may not be legitimate.
The same goes for your policy itself.
Maintain a written copy of all of your policy’s stipulations.
You will be able to use it as a reference if there are any discrepancies.
How An Insurance Calculator Can Help
If you are in the market for life insurance, an insurance calculator can be your best friend.
Most of these are free on the internet.
Every insurance calculator is different, and some are more thorough than others.
But they will all get a result that is an accurate estimate of what you may end up paying for life insurance.
To calculate your payments, you will need to answer a few questions.
You might be asked about your income, your spouse’s income/insurance, and your children.
You might also be asked about how you typically spend your money.
Your spending habits often translate to how much money your family would spend on average in the event of your passing.
An insurance calculator may specifically tell you what type of insurance you should be seeking.
Permanent insurance policies mean you are covered until your death.
These plans are great for those who want sustained coverage over a long period of time.
Term insurance policies mean you are covered until a specified time.
These plans tend to be cheaper, although they do not cover a person for the rest of their life.
Instead, these policies are designed to assist people who don’t believe they have a permanent need for life insurance.
This could include those with a curable, but serious illness.
This could also include those with large expenditures who don’t want to have increased financial responsibility in the event of a death.
The policy that is right for you depends on your life and your circumstances.
There is no wrong answer.
Either way, it is always better to find a plan that is tailored to your exact needs.
Insurance calculators can even be helpful if you already have insurance.
Many people feel that their current coverage is not enough.
They are worried that their coverage will not cover all of their family’s needs if a loved one were to die.
An insurance calculator can help you determine if the coverage you are getting is less than you deserve.
Scammers are able to take advantage of people because many do not have the knowledge to defend themselves.
An insurance calculator is the best way to obtain as much information as you can.
This way, you will know whether or not you are potentially involved in something illegal.
There are many honest insurance providers out there.
But insurance is an industry that not many people know how to maneuver.
Because of this, even licensed insurance professionals can take advantage of people easily.
Using an insurance calculator before receiving a price estimate is the best defense against these scammers.
After all, choosing a life insurance policy is one of the most important decisions you will ever make.
It is important that you make the right decision.
If you have any questions or concerns on how to use an insurance calculator, please comment below!
