Risk Management and Insurance

There are some general things to be aware of in buying insurance. In addition, there are details specific to each type of plan (these are not covered here). General things to watch for include:

• • Is the company licensed in my state?
• • What is the financial rating and reputation of the company? (Best’s is one service that rates insurance companies.)
• • How does the insurance policy match one’s specific needs? In all of these areas, there are a number of areas in which policies differ. Be sure that the details of the policy fit your needs.
• • Is the policy a good value? What sales charges are included?
• • What provisions does the policy include in the event one’s needs change or in the event one changes his or her mind later about this coverage?
• • Does the company have a good reputation for paying claims promptly and fairly? How committed is the company to the particular type of business? This is particularly important in areas like annuities and long-term care, where it is expected that the policy will be ongoing for the rest of one’s life.