Is my life insurance a good deal?

This is a pretty subjective question, but I have a few thoughts to share that I think can make you more comfortable about your life insurance purchase.

Does it match your needs?

When you purchase life insurance that you don't need or doesn't accomplish what you intend, then that is a bad deal no matter how cheap it is. Think about why you purchased or are purchasing the life insurance. Debts, funeral expenses, income replacement, estate taxes, tax free investing, etc. all have different life insurance product needs. If you want to make sure your wife and small children have income to live on until the kids are grown, then find yourself a level term product that lasts until your kids are adults or the age you plan to retire. If you want to make sure your funeral expenses are paid for, then a guaranteed whole life insurance product that will pay if you die tomorrow or 50 years into the future probably makes the most sense.

Price

I always recommend that you research and shop around to find a plan with a good rate at a company with high ratings and a high level of customer service. I apply this philosophy to most of my shopping. When I get ready to purchase a new electronic gadget that I need, (or want, whatever) I will usually look up the product on both Amazon and Google Shopping just to see what the going rate is. I love shopping with Amazon. Their service is great and I really trust them as an online retailer. If their price is pretty close to the lower prices on Google Shopping, then I will usually buy from Amazon rather than risk saving a few percentage points to go with an unknown company or someone on Ebay.

When I buy running shoes, I usually go to a store that specializes in running shoes. The people there usually are runners and they know their shoes. They usually pull about ten pairs of shoes they recommend and we work for about thirty minutes to find the perfect shoe. Sure I could probably find a better rate if I purchased online or from an athletic super store but with a running shoe, finding the really good shoe is more important to me than finding the cheapest shoe.

When I purchased my life insurance, I took the same approach. I went to an online life insurance website that I trusted and got a list of companies and rates. I went with the second cheapest company for the type of product I wanted because the company had higher ratings and was only a few dollars more expensive per year. I didn't even check other websites or shop with other agents because I had found the shopping experience I trusted the most to find the life insurance product that fit me the best.

Michael, Garden State Life Insurance

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realLIFE Stories

If you have never taken the time to check out some of the videos that LIFE puts out, then I encourage you to do so. These can be especially helpful if you have a spouse who is reluctant to move forward with a life insurance purchase. Seeing the positive impact that life insurance can have on those we leave behind can do wonders for helping us to take care of these types of things we don't like to think about.

realLIFE stories

This month LIFE is working hard to bring awareness to disability insurance. As much as people put off purchasing life insurance, I would say that even more neglect disability insurance.

Michael, Garden State Life Insurance

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Spending habits during a recession

There is a study recently published by M&C Saatchi, a global advertising agency with headquarters in London. It puts consumers into categories based on their behavior and reaction to the recession.

I'll get to those categories in a minute, but I think it's important to first note that the premise of this study is that while we are all effected by the recession differently depending on where we live and the local economy there, we generally are reacting to the macro economy - as it's reported by mass media.

We are bombarded daily by dismal reports of national or even global economic downturns. We cannot help but let this color our thinking. Yet, things might actually not be so bad in the immediate area around us.

So, the study and the categories are generated by how we are reacting to macroeconomics.

‘Reacting to Recession' is the name of the study. It identifies and categorizes attitudes and behavior adopted by different groups of consumers. The study finds eight consumer types with distinct approaches to spending in this recession.

Each identified group has adopted an overall specific behavior to cope financially with the downturn.

Crash Dieters

Scrimpers

Abstainers

Balancers

Treaters

Justifiers

Ostriches

Vultures


A caveat before the descriptions: they're not based on socioeconomic status, meaning that you can be in the Crash Dieter...and a millionaire.

Crash Dieters are the largest segment, grabbing 26% of adults participating in the study. The group was so named because it aims to "shed pounds" from their weekly budget by identifying and cutting out all non-essential spending until things improve. Crash Dieters are a heavily cash orientated group. Debt clearly frightens them (or is unavailable to them). They live from week to week and when the money runs out they're forced to take quite drastic action.

Scrimpers made up 13% of the study population. Cutting spending is still a main reaction, but they want to maintain their lifestyle and are reluctant to make sacrifices. "Trade down" is more their philosophy than "cut out." Cheaper stores and private labels have become more important to them.

Abstainers, like their Scrimper brethren, don't plan to make any huge cuts in spending habits. About 15% of the population are Abstainers. "The big purchases can wait until the economy improves," is what they'll tell you.

Balancers is one of the smallest groups. Nearly one in 10 people in the study fit into this category, which doesn't want to compromise or make any changes to their pre-recession lifestyle. However, a monetary crisis for them, say a job loss, triggers abrupt behavior. There's no "trading down" - It's gone.

Just over 12% of the study population are Treaters. You could describe them as Crash Dieters who occasionally binge. Every once in a while, the frugality they have adopted to deal with the recession gets rewarded by the purchase of something they promised themselves they wouldn't get.

Another 12% are Justifiers. They'll spend, but they need to have a reason - and it's not price-sensitive. If it's a newer version of something they already have, they want it and convince themselves it's a wise expenditure.

Everybody knows what an Ostrich does when it confronts danger - supposedly - and this is the way 9% of the study population is reacting to the recession. They're simply ignoring it - either because they have sufficient means to do so or because they have been brought up to believe that large balances on credit cards is the accepted norm.

At 4%, the smallest category was given the name Vultures. They're thriving on the carnage caused by the recession. Prices on many things have plummeted. They're swooping in and purchasing all they can.

The study is ostensibly for the purpose of how to market to these groups during the recession; and these distinctive categories of behavior strongly show that there may be only one recession globally...but we certainly are not all reacting to it in the same way.

Obviously, the propensity to purchase life insurance products at this time by these categories presents the same types of obstacles and challenges as any other industry.

Do you recognize yourself in any of them?

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