Sure, it's dull, grim, and confusing. Counting pennies (dull) to prepare
for death (grim) while trying to time your demise and your dependents' needs
(confusing, not to mention grim) is enervating stuff indeed.
Add to that the insurance industry's compensation structure, which rewards
its agents for selling you more than you need, and you can see why this is
a topic that is perfect for Fooldom.
A few quick points to get you started:
1) Insurance is not an investment. Period. End of discussion. It's not an
estate planning tool. It's not a "wealth accumulator." It won't unclog your
sink or declaw your cat. In short, it is a financial product that protects
against the financial consequences of a loss. We cover in detail
what it is and
what it is not here.
2) Ask your insurance agent how he will be compensated for the products he
is trying to sell you. If you don't get a straight answer, head for the door.
The more you know about how he makes his dime, the less likely you'll be
buying needless products that fund your agent's lovely summer home in Nice.
3) Insure the right stuff for the right amount. Should you buy insurance
to cover your credit card debt in case you kick off while you still carry
a balance? No, because guess who really benefits from it... Bingo! The lenders.
They routinely write off losses from dead people, as you'll discover in
Step 6. And should you really
try to leave your loved ones a lottery-sized inheritance? Absolutely not,
as we discuss in Step 8.
4) As with every area on our forum, a community of Fools awaits your every
insurance conundrum. Don't be shy about asking questions or posting replies.
And now onto our nine Foolish Steps to understanding and purchasing insurance.
See Also
