what you need to know before buying Life Insurance
choosing a life insurance policy is uncomfortable and difficult.No one wants to think about his or her own death, and the policies themselves can be extremely complex and difficult to understand. In recognition of this, the Financial Services Authority is investigating the financial sector, and in particular is taking a good look at life insurance.
All providers of financial services in the U.K. are subject to regulation by the Financial Services Authority, which tries to protect consumers when they purchase financial products. The Authority’s studies have shown that most customers face a dearth of information when they try to make informed decisions. Without adequate information about the life insurance policies, customers are hard-pressed to identify and purchase the best policies for themselves and their loved ones.
Most people who are unfamiliar with life insurance are at a loss to understand what is and isn’t included in various policies. This is especially true for the policies that combine investment options with life insurance coverage, which, when it works properly, can benefit both the provider and the policy holder, and is especially attractive for younger consumers, because they can expect to build up a larger return over the course of their lives.
One notable cause for the lack of information is that many policy holders are left studying policies that they purchased years ago, receiving little or no updated information from the life insurance provider. Thus, it is difficult if not impossible for them to make informed decisions.
Consequently, the Financial Services Authority is using its regulatory power to insist that the providers of life insurance policies provide additional and more detailed information when they sell new policies to consumers. Furthermore, the providers are being asked to make sure that their customers understand the policies they are being offered. Providers are also encouraged to give advice to consumers as needed.
Individual consumers who are still leery of trusting the life insurance companies, or who fear that they don’t fully understand the policies, may want to use the services of a broker who specializes in life insurance policies. These brokers are easily able to compare and contrast the coverage and costs of the available policies, and then present this information in an easily understood manner to the unconfident consumer. These brokers are specialists at helping their clients find the best life insurance policy for their specific needs, at the lowest price possible.
If you nevertheless choose to do the research on your own, proceed with caution, but know that it is possible. Be particularly careful, however, to read the fine print and be sure to understand all of the exclusions and limitations contained within the life insurance policies.
