Use caution when buying insurance via Internet

The Society of Financial Service Professionals recommends caution in purchasing life insurance and related products online.

The society, a national organization representing 32,000 credentialed financial advisors, emphasized that the growing availability of online financial products might make buying insurance seem easier than it actually is and uninformed choices may prove costly in the long run.

"It often takes more than a few mouse clicks to make a good decision when selecting what type of policy to buy and how much coverage your family needs," said society President Clark B. McCleary, CLU, ChFC, in a press release. "The Internet provides a wealth of financial product information, but sorting through and interpreting all this data requires the help of someone who understands your financial goals and objectives."

For those who are in the market for insurance or a related financial product, McCleary offered these buying tips:

Comparing two or three policies may be prudent, but make sure you are comparing apples to apples in terms of policy coverage, guarantees, exclusions, penalties/fees, and riders.

When you've narrowed your options, be sure to check the financial stability of the insurance company issuing the policy or insurance product. Consult popular insurance company rating services such as A.M. Best and Standard & Poor's.

Before you sign any contractual agreement, make sure you understand what is in the fine print; ask your agent or financial adviser to fully explain what's covered and what is not.

Be sure you understand the penalties for early withdrawals and what happens if you stop making premium payments.

Review your policy within your overall financial plan and the products that fund it on a regular basis, especially if your family circumstances change as in the case of marriage, divorce, remarriage, birth or death.