Life insurance mistakes to avoid
Buying a life insurance policy - or boosting the amount you already have - is almost always a sound financial decision. By making a small payment to an insurance company you can ensure that your loved ones will be protected in your absence.
Most financial advisers recommend life insurance, regardless of your age or health. And many employers provide it alongside traditional medical and dental benefits. They even allow for discounted rates for supplemental coverage, if you should pursue it.
While life insurance types are expansive and can be tailored to your individual needs and circumstances, it can seem that this is a relatively easy personal financial decision to make. If you're currently in the market for life insurance, then start by getting a free price quote so you know exactly what to expect.
3 life insurance mistakes to avoid
As you embark on the life insurance process, however, steer clear of these common mistakes:
Underestimating the coverage you need
How much life insurance you need is specific to your individual circumstances, personal financial health and preferences. There's no clear figure that applies to everyone.
With that being said, life insurance provides a final opportunity to leave your family with monetary support. Don't discount that. If you can afford it, go with the higher amount. If you have an approximate idea of how much coverage you want, speak to a provider and get a free price estimate now.
If you're young and single you may not need as much insurance as you would if you're older with a family. But if you're married, you'll want enough to cover you, your spouse and any lost wages that could result from your death. If you have children you'll want to cover them, too. And if you have a mortgage - and don't want to leave your family without your income to pay it off - then you'll want enough insurance to cover that.
Factor all these considerations into your thinking when trying to determine how much coverage you'll need.
Not comparison shopping
As is the case with most personal financial decisions, you will want to do your homework to make sure you're making the right choice. Don't just accept the first low offer you get. Maybe you can get a higher coverage amount for a lower premium.
You shop around for mortgages, home and auto insurance and even student loans. Do the same for life insurance. Different providers offer different coverage. Get a quote from Haven Life to start or use the table below to start comparing your options.
Only compare what's out there once you know exactly what you want and how much you want to pay. Do an apples-to-apples comparison to accurately gauge your offers.
For example: If you're looking for term life insurance coverage for $250,000 from one provider, make sure you're looking for the same type of insurance for the same amount from another. Otherwise, it'll quickly become confusing.
Buying it later in life
Sometimes it makes sense to save up and delay purchases for when you have a bit more money in your pocket.
That's not the case with life insurance. The longer you wait, the older you'll be and the more expensive you'll be to insure. Those costs will be reflected in the premiums your life insurance company wants you to pay. Each year you age the more expensive a new policy will become so it makes sense to start as early as possible.
Even if you can't afford the coverage you want at an earlier age it's better to have something in place than nothing. Particularly when you know that waiting around is not advantageous.
Other life insurance mistakes to avoid
While the above mistakes should definitely be avoided, there are some additional items you should circumvent when getting a life insurance policy. This includes:
- Not being ready for your medical exam. An insurer may require that you take a full medical exam prior to their approving your application. This will involve bloodwork, urine testing, and pulse and blood pressure monitoring. Make sure you're prepared for this by managing your salt and alcohol intake. Avoid caffeinated drinks, too. And be sure to ask if there are other steps to take before the examiner begins to help ensure your test is as positive as possible.
- Overreliance on employer coverage. Many employers will provide a baseline level of life insurance coverage. But it will be just that - a baseline level of coverage. Don't only rely on this protection. If it doesn't seem enough then consider supplemental life insurance, too. You may be able to get a reduced rate if you go through the provider your employer uses for your standard coverage.
- Mismanaging your beneficiaries. You get life insurance to protect your loved ones after your death. But make sure they can readily access that protection by correctly listing the beneficiaries on your policy. So, don't list a minor as your primary beneficiary (unless, of course, they really are your sole beneficiary). It's generally better to list your spouse or an adult as the primary and have children and minors as secondary ones. Consult a life insurance expert who can help you build a plan that works for you and your family.
While this list is not a comprehensive one, it should help steer you in the right direction. If you have specific questions about coverage, what you qualify for and how much you can expect to pay, it's easiest to speak to a provider. They can answer your questions and help find a budget-friendly policy that's right for you.
Start by getting a free price estimate now.
for more features.