7 Life Insurance Planning Mistakes To Avoid

7 Life Insurance Planning Mistakes To Avoid

Nick Youngson

Buying insurance is a crucial decision. While you may not have the time to learn about insurance policies you have several resources online that can help you plan for a better future. Here are some mistakes you have to avoid when buying life insurance for you and your family.

Life Insurance Planning Mistakes To Avoid

1. Focusing On The Price

While it is important to find an affordable policy price isn’t the only factor that you need to focus on. There are several options online you can find to compare not just policy prices but policy cover as well. Before you sign the dotted line please check the fine print. Your focus on the policy price could end up being your most expensive mistake. [1]

2. Not Knowing Your Objective

Treating life insurance as a tax saving on your income and salary shouldn’t be your primary objective. As you know a life insurance policy is to protect the dependents of the breadwinner in case something happens to them. If you clearly state down what you expect from your policy your insurance company or agents can help you pick a policy that meets your needs. [2]

3. Not Enough Cover

A thorough analysis of your needs and the needs of your dependents is necessary before buying life insurance. God forbid if something happens to you, would your children be able to keep up with their current lifestyle based on the policy payments? Consider buying a life insurance policy that adequately covers future requirements as well. [3]

4. Review Your Medical Records

Some insurance companies require you to take a medical exam before you sign the policy. If they provide for one opt for it if it’ll be cheaper for you. If you have a clean bill of health your insurance premiums can be much lower. Review your medical records to find out how you can get healthier if needed. [3]

5. Review Your Policies Periodically

Your life insurance policy isn’t a one-time affair that you should just get and forget while the premiums get paid out. If you’ve made changes to your policy in the past you have to pay attention to how that affects your policy payments. If you have a financial planner sit down with them occasionally and discuss how the changes affect you. [4]

6. Waiting Too Long To Plan

Individuals would rather pretend that everything is always going to be okay then admitting that there are things which are out of their control. It would be much wiser to spend a small amount on a premium rather than not getting a policy at all or waiting till its too late. It’s better to be safe than sorry.

7. Not Doing Enough Research

The internet is a wonderful tool for research. You have unlimited information at your fingertips. Use it wisely and you can find exactly what you need at the price you need. Not doing enough research either online or offline is a terrible sin when it comes to planning to buy your insurance policy. Ask as many questions as you can. Don’t be afraid to take several opinions, ask experts for advice and take costs from different companies. [2]