I came across an article last week entitled “What is the Best Life Insurance You Can Buy?” Now any article so named is apt to be so general so as to be devoid of any real benefit and this one was no exception.
First, it’s unclear from the title if the author
is referring to a type of policy or a company.
While she does mention they different types of policies available, the
bulk of the article discusses what she contends are the five best companies.
To her credit, she first establishes the
criteria she is going to use to pick the best companies and I am in agreement
with three of her five picks. Mass
Mutual, Northwestern Mutual and AIG deserve to be on the list. I do question inclusion of her last two.
She said she included State Farm because it
is ranked highest in customer
satisfaction by J.D. Power three years in a row. While customer service is unquestionably
important, it doesn’t make a product any better. Since one must be a State Farm agent to sell
their products, the only time I see them is when a prospect owns one and from
those I’ve seen, they’re not very competitive.
The
last of the author’s five best companies is Mutual of Omaha. I’m familiar with the company and they do
have some interesting products that serve some very specific markets, naming
them a top five company is a stretch, in my opinion.
By
any measure, New York Life should be on every top five list. A venerable mutual
company, they offer a wide spectrum of competitive products that can solve most
problems requiring a death benefit.
While
most of the article offered useful information, it didn’t answer the question
the title asked, so I will. The best
life insurance you can buy is a policy that meets your needs with a premium you
can afford. The type of policy (term or
whole life) isn’t nearly as important as carrying an appropriate amount at an
affordable premium.
There
is no one size fits all for determining needs.
Only a detailed analysis of your particular situation can come up with a
reasonable approximation of the needed amount.
The rules of thumb bandied about such as five to seven times earnings
are so general that they could only wind up being accurate by happenstance. (By the way, twenty times earnings is far
more likely to be accurate than five to seven times.)
A premium you can afford is much easier to determine than the amount you need. But getting the amount right is the critical part. If you’re carrying an appropriate amount, your head can hit the pillow knowing that should fate intervene, your loved ones won’t have to pass the hat to get by.