Life Insurance - Fargo ND

Life insurance is an often neglected part of your financial plan. There are lots of options for purchasing life insurance in Fargo, where you buy will depend upon primarily upon the purpose for the insurance. Costs do vary based on the type of insurance you purchase and some companies are more efficient and competitive than others.

What Is The Purpose Of Your Life Insurance Purchase?

If you are purchasing a $150,000 term policy for the next few years because you have a $130,000 mortgage and $20,000 of other debt, then this may seem like a fairly simple and straight forward scenario. Many people will shop around for quotes and take the lowest rate they find. If they want the insurance for 10 years, they might purchase 10 year level term instead of a year to year term. If this is your mindset, you may want to talk to the agent you purchased your car insurance or home insurance from to see if they can give you a quote. This is assuming you have a good relationship with your agent.

If you are purchasing life insurance for a more complex purpose such as estate planning or a business buy out, you will want to choose an experienced agent who is qualified to help you. A well trained life insurance agent is typically a Chartered Life Underwriter (CLU) or Chartered Financial Consultant (CHFC). If it's a young agent they typically have a mentor agent and are working toward their credentials. These agents will often have relationships with some of the best estate and business planning attorneys in Fargo as well, so they can be a valuable liaison.

Why Chose A High Quality Company?

When making a simple insurance purchase people often don't consider the financial stability of the company they choose and tend to choose based solely on premium. The problem however, is that no one knows when an event will take place that renders us uninsurable. A cancer diagnosis or heart attack can dramatically change the premiums you would pay or whether or not you would even be insurable.

Term Conversion - Most quality companies have term conversion options where you can convert your term insurance to a permanent product ( Whole Life, Variable Life etc ) at any time during the term of the coverage. This is a valuable benefit if something happens during the time frame that renders you uninsurable.

If you are ever in a position where you need to convert your term insurance to permanent coverage, it would be preferable to have the coverage with a financially solid company that won't disappear on you. Events of the past few years shook the foundations of all the life insurance companies, financial strength should definitely play a part in any Life insurance purchase.

Types Of Life Insurance Available In Fargo 

 As with all types of insurance, the life insurance market in Fargo is very competitive so you will find any type of product you could possibly desire. Regardless of what type of insurance policy you purchase it is all based on the same premise, the odds that you will die in the coming year. That is the predominant factor that makes up the basic insurance premium for the coming year.

Term Insurance -  If you purchase simple term insurance you are covered if you die in the next year. On the anniversary date of the policy it can be renewed but since you are a year older it will renew at a higher rate. As you age this type of policy becomes increasingly unaffordable. If you need insurance for estate planning or similar purposes this is not a good choice.

Level Term -  The next insurance product is Level Term. In this type of policy you establish a level premium for a specified length of time. 5, 7, 10, 20 or even 30 year level term are possible, as the time frame lengthens the premium goes up as there is a higher probability that you would die during the term of the policy.

Permanent Insurance -  This type of insurance involves paying a stable premium over your entire life. When you are young you will pay a higher rate than what it actually costs to insure you and the excess money is set aside to pay for the cost of insurance which will be substantially higher when you are older. These types of policies can grow in face value over time as well as build cash value which can be loaned against or even withdrawn. When you die, the proceeds typically will go to the beneficiary Tax Free which is why it's a valuable part of any estate plan.

Whole Life or Adjustable Life -  These are straight forward permanent insurance products that pay regular dividends based on the performance of the insurance companies performance. Interest rates earned on the investments made by the insurance company is the primary determining factor as to how much dividend is paid to policy owners. Adjustable products allow you to easily adjust the amount of coverage, whereas traditional whole life products didn't have much flexibility.

Universal Life -  Universal Life Insurance was designed to compete with high interest rates earned on CD's during the 1980's. Basically, the premium paid above the cost of insurance was put into an interest bearing account and earned a favorable interest rate. These rates were high ( 9-10%) as recently as the early 90's, but have declined dramatically with lower market rates in recent years. That is why they have fallen out of favor.

Variable Life -  Variable Life has taken over for Universal Life in most companies. The product behaves similarly except the excess premium is invested in the stock market (usually an index or fund) instead of an interest bearing account. The powerful stock market rally in the late 90's caused a rush to variable life products. In order to sell this type of products insurance agents need to have a securities license in addition to proper insurance licenses.

High Quality Companies Specializing in Life Insurance In Fargo Include:

Principal Financial Group

New York Life

Farmers Insurance Group

Met Life

Prudential