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EXPERTS OFFER TIPS ON LIFE INSURANCE BECAUSE IT'S GONNA HAPPEN.

Byline: Chris Sieroty Staff Writer

Just married, starting a business or having a child? Now it's time to buy a life insurance policy to protect your loved ones or investments in the event of your untimely demise.

But there are so many kinds of insurance that it's difficult for the average consumer to sort through the commission-hungry agents and insurance-speak to find out what you really need.

Here are some tips from agents and the Washington-based American Council of Life Insurance to keep in mind when shopping for a life insurance policy that meets your family's needs. For more information about insurance, call the National Insurance Consumer Helpline at (800) 942-4242.

CHOOSING AN AGENT

Collect the names of several agents through recommendations from friends, family, business colleagues and other sources, said Robin Morishita, a senior financial advisor with American Express.

If you still can't find an agent, Dennis Sokol, an agent with Farmers Insurance Group in Sherman Oaks, suggests looking for someone employed with a reputable insurance company.

However, before doing business with an agent:

--Make sure the agent you use is licensed to sell insurance. ACLI says licensing is a requirement in all states.

--Agents who sell variable life insurance products must be registered with the National Association of Securities Dealers and have additional state licenses.

--Check the company's financial condition, which you can do by contacting the California Department of Insurance.

--Remember, ``If it sounds too good to be true, it probably is,'' said Sokol.

TIPS ON BUYING LIFE INSURANCE

--Ask for outlines of coverage so you can compare the features of several policies.

--Make sure that you fully understand any policy you are considering and that you are comfortable with the company, agent and product.

--Always answer questions about your medical history and health carefully and truthfully.

--Contact the company or agent if you don't get your policy within 60 days.

--Always check the date the insurance becomes effective.

WHAT KIND OF INSURANCE IS RIGHT FOR YOU?

--Term Life Insurance

Term life insurance requires that you pay a fixed premium for a certain period of time for a guaranteed death benefit in the event of your untimely demise. Should you die before the term ends, your beneficiaries will receive a check from the insurance company. Should you outlive the term, the insurance company keeps the sum of your premiums and your beneficiaries get nothing.

There are two basic types of term life insurance. An annual renewable policy allows you to renew your term insurance every year without a medical exam. However, your premiums will go up. You can also buy a level premium term insurance policy. This will guarantee that regardless of how many years you choose to renew the policy, the premium will remain the same. However, expect to pay higher rates in the early years of the policy.

--Permanent Life Insurance

Permanent life insurance provides lifetime coverage, as long as you keep up payments on the premiums. Permanent policies come as whole, ordinary, universal, adjustable and variable life, each with its own characteristics and benefits.

The policies also issue dividends each year. They can be used for reducing your premium level; purchasing increased death benefits; increasing the cash value by accumulating interest; and cash payments, which are considered taxable income.

--Group Life Insurance

Life insurance companies offer employers, unions and other organizations the option of providing life insurance to their members or employees through group life insurance policies.

Although most group life policies provide term coverage, most states require a conversion privilege allowing employees to convert their policies to permanent insurance and pay premiums directly to the insurer when they leave their job or organization.

EXPENSES

Morishita asks potential clients: ``Why do you need life insurance? Is it because you have children who will need money for college, medical expenses or to meet living expenses for a spouse?''

Morishita suggests consumers purchase life insurance equal to seven times their annual salary in case their family needs the money to pay for regular expenses like food, clothing, mortgage or rent payments.

``Before you find an agent, it's important to assess what costs to cover in case of premature death,'' said Herb Perone, a spokesman for the American Council of Life Insurance.

ASSETS

--Your spouse's income: How much money will the family be bringing in annually once you've died?

--Savings accounts: Will your family be able to tap into savings accounts to meet expenses after your death?

--Retirement benefits: Social Security contributions will go to your surviving spouse. But it's best to talk with the government agency to determine how much the benefit will be and how often it will be received. Also, does your employer offer you a pension that will be given to your spouse when you die?

Taking a look at your assets also will help you figure out how much insurance you need to purchase, said Perone.

LOSS OF A LOVED ONE

When there is a death in the family, life insurance can provide cash quickly to meet pressing needs. To receive that cash, you have to file a claim. ACLI suggests you:

--Get several copies of the death certificate.

--Call your insurance agent. He or she can help you fill out the necessary forms and act as an intermediary with the insurance company.

--Don't keep your life insurance policies in your safe deposit box, because in most states, boxes are sealed temporarily upon the death of the owner.

--If you do not have an insurance agent, or do not know who the deceased's agent was, contact the company directly.

--Submit a certified copy of the death certificate from the funeral director with the policy claim. Once the claim is submitted, a settlement should be issued.

``The reason people have life insurance also will change over time,'' added Morishita. Younger people, in most cases, need life insurance to supplement their earnings in case of premature death. Middle-aged Americans might buy life insurance as part of a retirement package. Individuals who are retired use life insurance for estate planning.

In the end, there are two simple reasons to buy life insurance, said Perone: ``To take care of who you love and who you owe money to.''

DEATH ON THE WEB

Here is a sampling of insurance Web sites that offer a host of information:

Aflac Insurance --www.aflac.com

American Fidelity Group -- www.af-group.com

American Republic Insurance Company -- www.aric.com

Baltimore Life Insurance Companies -- www.baltlife.com

Countrywide Insurance Services -- www.cwinsurance.com

Liberty Mutual Insurance Company -- www.libertycentral.com

Life Insurance Analysis Center -- www.underwriter.com

Life Insurance Quotation Express -- www.safenet.com

New York Life -- www.newyorklife.com

Quotesmith.Com Inc. -- www.quotesmith.com

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Article Details
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Title Annotation:Business
Publication:Daily News (Los Angeles, CA)
Date:Dec 31, 1999
Words:1143
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