Are life insurance companies taking advantage of people? Are they overcharging with their premium rates? Is life insurance simply unnecessary evil? These are questions that most of us have asked.

First, we can probably assume that you and I agree that it is difficult to defend any large corporation. If we accept that almost as a universal given then the real question you and I need to ask ourselves is, are insurance companies giving us a fair exchange for our premium dollar?

Even though a good case could be made that life insurance premiums could and should be lower it’s probably still a good purchase for us. Taken down to its basics life insurance enables a large group of people to share in the financial well-being of the individuals in the group. No doubt as the coordinator for the group, insurance companies probably do better than anyone else in the group but they do perform a good service for most of us.

Obviously it is much better for us to think selfishly in this and make the purchase because it is a profitable one for us and our beneficiaries and not dwell on the fact that the insurance industry is a quite profitable one for them.

Yes it is true that the only way someone benefits from a life insurance policy normally is through a death but unselfish love looks past the punch line and sees how it will help the beneficiary of a life insurance policy. Unless you are able to actually live to be 100 years old it is extremely likely that your beneficiary will receive more money from the insurance company then what you paid into it in the way of premiums. If the value of a life insurance policy is $500,000 it is likely that the premium payer spent all whole lot less than that for this financial protection.

Frequently when we speak of life insurance it is in context of marriage and a family. In today’s society it is not as frequent that there is one wage earner and the other does not have an outside employment but nevertheless if a couple, if a family has been living on 2 incomes the sudden and unplanned death of one of them will bring financial hardship on the surviving partner.

Perhaps the best way to walk that fine line between over paying on a life insurance policy and the need for a reasonable amount of life insurance is to always deal with a local independent agent. While they are going to have as much drive to make money as anyone else at least they are free morally and legally to seek out the best buy for their clients. It’s your duty to be sly in working with any agent but again you’ll save the most money by dealing with a local agent.

So, are insurance companies stealing from us? Probably your point of view determines the best way to answer this important question. There is no doubt that the majority of insurance companies do make exorbitant profits year to year but that does not make it an unwise purchase for you. The financial bottom line frequently is simply that for a few hundred dollars of premium per year many people do buy hundreds of thousands of dollars in insurance protection for their family.

Tags: Business

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