Now that you have decided the type and amount of insurance you need, it is time to look for a good buy. There are two key indexes that can make it easier to compare costs of different policies. They are:
- Surrender Cost Index
- Net Payment Cost Index
Generally speaking, look for policies with low cost index numbers.
About cost
“Cost” is the difference between what you pay for something, and the value you receive in return. If you pay the premium for life insurance, and you receive nothing in return, your cost is equal to the premium paid. If, on the other hand, you pay a premium and you receive money in the future—such as cash value—your cost is less than the premiums paid.
Another way to get “value” back from an insurance policy and possibly lower your cost, is to choose a “participating policy.” This type of insurance pays you dividends. The amount is determined by the insurance company each year.
Policies that do not pay dividends are called “guaranteed cost” or “non-participating” policies. With this kind of insurance, every feature is fixed so you know exactly what your future costs will be.
Participating policies usually charge premiums that are higher than guaranteed policies, but your cost may be higher or lower, depending on the actual dividends paid.
Email us or call 1-800-704-2180. Remember, it costs nothing to apply and you have 30 days to review the policy before the first premium is due!
