If you have financial dependents, it makes sense for you to start thinking about getting life insurance. Life insurance is an essential responsibility for you to consider as you get older. It’s all about ensuring financial security for yourself as well as a death benefit for your family members.
However, you might be confused about the concept and make common mistakes when you’re buying life insurance. Below we will discuss the top 4 mistakes to avoid when buying life insurance.
There are critical things that you should know before you go about the process of signing up for life insurance. Here are four of the biggest mistakes that you should avoid.
1. Waiting Too Long To Secure Life Insurance
Waiting too long to purchase life insurance is a common mistake a lot of people make. This mistake puts your family at a huge financial risk if you develop a life-threatening illness or die before you buy insurance.
Therefore, you’re making the right decision to not procrastinate on life insurance. Using this precaution helps you to provide financial security for your family and make them less vulnerable.
A huge advantage of not waiting to long is you very well are healthier today then you will be in the future. This can save you huge amounts of money since the life insurance policy premiums are based on your health.
2. Not Reviewing Your Life Insurance Policy
Taking a long time to review your policy is another common blunder. It is advised by experts to review a life insurance policy every couple of years. Reviewing your policy periodically ensures that it still fits your needs.
After reviewing your policy you will know if you may require more or less coverage. You might also decide that you want a new life insurance policy covering a longer period of time. In this case you can look at laddering the term expirations dates. In this scenario you would have your current term life insurance policy expiring in the next 5-10 years but you would add another policy that will extend beyond that policy. This way you will have more coverage while you need it now and still have some coverage going past the original policy expiration.
3. Failing to Shop Around For The Best Life Insurance
Try to avoid buying the first policy that you hear about. Keep in mind that life insurance quotes for the same coverage will vary with each company. So, you should shop around and compare prices. This helps you to know your options, determine how much coverage you need, and apply for the policy that fits your criteria.
This is why it is key to work with an independent life insurance agency like Spectrum Insurance Group. We will shop the market to not only find the best rate category that you will qualify for but also the carrier that will offer the most competitive rate for that health class.
4. Naming Children as Beneficiaries On The Policy
When you buy the policy, you could make the crucial mistake of naming your child as the beneficiary. If you die before the child reaches legal adulthood, the life insurance company will refuse to pay the death benefits unless the child has an appointed guardian. Or hold the funds until the child reaches legal age. This process could also cause complications. Therefore, it is necessary to name your spouse or other adult family members as the beneficiary.
If you have no other beneficiary that you would like to list. You may have the option to make the beneficiary a trust this way the insurance company would pay the death benefit to the trust and then that money would be able to be used from the trust for the child’s needs while growing up. This can avoid the child waiting until they are 18 to be able to access the funds.
Follow the Right Steps to Get Coverage that Aligns With Your Needs
Once you have people such as a child or spouse that depends on you financially, life insurance is a priority that you should not delay. Learning about common mistakes that you should avoid makes it easier for you to get the best life insurance policy. You also have the advantage to get help from a team of committed life insurance specialists.
Do you need an instant life insurance quote? At Spectrum Insurance Group, you can rely on us to help you compare quotes. Do not hesitate to contact us if you’re looking for new life insurance coverage and need more information.
As principal licensed life insurance agent Bennett Bier has helped 1000’s of people purchase life insurance online & over the phone. During his career he has become the go to expert for securing hard to place term and permanent life insurance policies for clients across the nation. With his wealth of knowledge of each life insurance carrier’s products and underwriting he provides honest answers and advice to every client. Bennett Bier and his team will work tirelessly to successfully secure the coverage your family deserves.
All content on this site has been written by life insurance experts & licensed life insurance agents.