Common errors to avoid when you’re choosing a life insurance policy.
Buying life insurance is one of the most important decisions are you going to make. You buy it to protect your family from getting caught out financially and to protect them when you are no longer around to do so. Most people think it’s a straightforward process of buying a policy and getting coverage – but there’s a lot more you should consider. Pay close attention to the policy you select so that you find the right one for your family’s needs. Take a look at common mistakes people make when finding life insurance.
Mistake No. 1: Only looking at the price.
Whether you’re buying temporary (term) or permanent (whole life) insurance, consider more than just the monthly premium. You should consider the insurance company’s financial strength and the policy’s guaranteed benefits. If you’re buying a term policy, compare the death benefit, and cost of the policy, and the insurer’s rating to competitors. If you need permanent coverage, also compare the assumed interest rate that each policy is offering.
Mistake No. 2: Automatically buying term life insurance.
With longer life expectancies, today’s 30-year term policies are cheaper and more cost-effective than ever, and usually best if you don’t need life-long coverage. However, many people have more than one need for insurance, such as to ensure the surviving spouse won’t lose the home while protecting the children from estate taxes. For this reason, you may need whole life insurance to better protect your family.
Mistake No. 3: Viewing the purchase as a one-time activity.
As with the rest of financial planning, evaluating life insurance needs is an ongoing process, not just a one-time product purchase. If you bought a policy 20 years ago, your death benefit might be much less than what you need today because your income and expenses are likely higher than they were. It’s best to review your policy every year and when major life changes occur, such as a job promotion, getting married, having a baby, or the death of a family member.
Life insurance is designed to protect your family from future risk. Making these mistakes, however, could be detrimental to your family’s finances. It pays to work with a professional and trusted agency. Contact Donald Weiss Insurance Services to get started on your coverage today.