People buy life insurance policies for many different reasons. To replace income lost should they die, to provide for the future of their family or perhaps the goal is to have the mortgage paid off for their survivors. Whatever the reason, many people understand just how important life insurance coverage is.
Unfortunately, when it comes time to buy a policy many of us make some pretty serious
mistakes that actually leave our loved ones in a bind.
Also Read: How Much Life Insurance Do I Need?
To best provide for your survivors, make sure you avoid the following common mistakes.
No one wants to think about their own death so it’s rather easy to put off buying coverage until later. Unfortunately for your loved ones, if your death is caused by an accident or sudden illness it will be too late.
Procrastinating can also cost you money. If you wait too long to buy a life insurance policy you could wind up paying more as you age or your health declines.
Relying solely on coverage through work
One benefit some employers provide is a life insurance policy. While it is nice to have the additional coverage, it usually won’t offer enough financial protection for your family. This type of policy should really only be used to supplement the insurance you already have.
Forgetting to plan for unexpected expenses
When you buy a life insurance policy you are usually concerned with having enough coverage so that your loved ones can pay their bills. However what about the unexpected costs? Did you factor in college tuition for your younger children? Is there enough money to pay for additional day care? Will your surviving spouse have enough money in the event he or she falls ill? Will your spouse have to pay for additional help to maintain the household? These questions all should be answered before you buy a policy.
Trusting quick quotes
Shopping for insurance online can be quick and easy, but it can also be problematic. Using online tools and quote calculators can give you a good estimate of what you need and what you can qualify for but it shouldn’t replace meeting with an actual agent who can ask, and answer, all the right questions for you.
Insuring only the primary earner
Not many families can live without the income earned by the primary breadwinner but what about secondary income? If you, or your spouse, are forced to maintain the household based on only one income, even if it is the main one, could you survive at the same level? If the answer is no then you need to make sure both people are covered.
Life insurance can be a tricky thing to navigate. Having a trusted agent can be a real asset when you are looking to purchase, or upgrade, a policy. If you don’t have an agent to help you out make sure you do as much research as possible before buying a policy and don’t be afraid to ask questions so that you, and your loved ones, have the peace of mind in the event something should happen.