Avoid These Mistakes When Buying Life Insurance

by Junior Boomer on November 9, 2012

Buying insurance is a difficult process. Insurance can be fairly high priced, and there are strict guidelines that many companies have for potential customers.

Making one simple mistake could mean paying a higher premium for insurance than you should be paying, or not getting insurance at all.

Many people make mistakes buying life insurance, and those mistakes make a big difference in whether they will be insured or not.

Finding the right insurance for you is a long and arduous process, but it’s important to shop around and fill out insurance applications carefully and conduct insurance interviews properly as well. There are some things that you should avoid doing while looking for life insurance, and here are a few.

First Mistake

One mistake people make when buying life insurance is buying term life insurance simply because it is less expensive. While saving money on life insurance is important, cheaper does not equal better in many cases. Term life insurance is certainly less expensive, but it isn’t wise to buy it just because it costs less. Instead, compare the rates and coverage offered by term life insurance with other companies, then make your decision.

Term life insurance is only temporary, and only lasts for 20-30 years. After that amount of time, it may be difficult to impossible to find affordable life insurance again. In many people’s cases, it is much better to buy permanent life insurance. Don’t buy life insurance without first looking into all of the details of the policy and determining whether or not it is suitable for you. And definitely don’t your let your life insurance policy lapse. Pay your bill!

Don’t be Cheap

Another mistake many people make is not buying enough coverage. It is recommended to buy a policy that has a death benefit that is ten times your salary. It is important to take into consideration your income, your spouses’ needs, your children’s needs, and other things in order to figure out how much coverage you need. Consult an insurance agent to get help calculating the need for coverage that you have. Many people also view buying life insurance as a one time activity.

It is commonly thought that once you buy life insurance, you’re set for life. Since family and life situations change, it is wise to get an insurance analysis once every few years so you will be getting the adequate insurance based on your current situation.

Many people also by from companies that are not the best rated companies. Insurance buyers tend to see a price that is desirable for them and only focus on the price, without knowing much about the company. Before purchasing life insurance from a company, make sure to research the company to make sure the company is a good company to buy insurance from. Do not settle for a company that has less than an A rating. Do not think that you have to settle for a lesser company to get a cheap rate.

Do not go into buying life insurance blindly, and try to make a well informed decision. Conduct all of the research that is necessary before deciding on a company and policy.

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