Life insurance is important to your overall financial plan and well being. It is also important when it comes to ensuring the long-term safety of your family. For this reason, you should do your best to avoid any and all mistakes. Even a small mix-up with your policy could lead to issues in the future.
Here are five big blunders that you want to avoid at all costs:
1. Underestimating Your Needs
Unfortunately, this is a big mistake that many consumers make time and time again. They don’t know how much coverage they need. In turn, they purchase the cheapest policy they can find and hope for the best.
Solution: Ask your agent for detailed information on how much coverage you need as well as what type would be best for you.
2. Not Considering All Options
Are you under the impression that all life insurance policies are the same? If so, you need to change your way of thinking. There are many options including term, whole, and universal coverage.
Solution: Research the many types of life products available online while also prompting your agent to discuss the pros and cons with you.
3. Neglecting The Details
With any insurance policy the details are terms are crucial. Just like any other contract, you need to know exactly what you are buying. The last thing you want is to purchase term life insurance when you thought you were getting a whole life policy. It is mistakes like this that could really throw a wrench into your plan.
Solution: read the fine print, no matter how long it takes. Additionally, don’t be shy about asking your agent questions. This will help you better understand what you are getting.
4. Letting Your Agent Talk You Into Something That You Don’t Need
There is nothing worse than an agent who will do whatever it takes to make money off of you, even if it means tricking you into buying something you don’t need.
As bad as it sounds, some agents will talk clients into contributing less to retirement so that he or she can buy more coverage. It is scams like this that give the industry a bad name.
Solution: collect as much knowledge as possible before requesting quotes for coverage. Also, if you feel that an agent is pushing you too hard it is time to find other help. Remember, there are plenty of agents out there who have the best interests of their client in mind.
5. Giving In to “Sticker Shock”
Many consumers are excited to about the security of obtaining a new policy until they see how much it is going to cost. Although this may be an eye opener it is no reason to shy away.
Solution: Don’t let this stop you from buying what you need. Instead, adjust your coverage as a means of lowering your premium.
Are you worried about these five life insurance blunders dragging you down? You are not alone. As a consumer, you need to make a smart decision that will benefit you and your family for many years to come.