Life insurance can be an important part of protecting your future, but, without careful planning and consideration, you could end up paying much more than necessary for protection. To best protect yourself from financial ruin or to cover the costs of an unexpected accident, it’s essential that you take the time to figure out what type of life insurance coverage is best for you. Here are five common mistakes people make when buying life insurance:
1. Buying too little coverage
Unfortunately, trying to save money by purchasing a low-cost plan that doesn’t provide enough coverage can often backfire, as the lack of coverage could leave you unprotected in the future. The best way to ensure you get the right amount of insurance coverage is to check out the different plans available, choose one that fits your needs, and then discuss it with your agent before applying for the insurance plan.
2. Not shopping around for the best rates
While it may seem like the best option is to simply remain with your current insurance plan, you should be sure to shop around for the best rates and coverage, especially when you are looking for life insurance. This can make a huge difference in how much you end up paying for coverage and could help you get a better deal without any extra work on your part.
3. Relying too much on employer coverage
It’s not uncommon for people to rely too much on the life insurance coverage their employer offers, but this often means they end up purchasing an insurance plan that won’t cover their living expenses or future debts after they’ve passed away. The plans offered through employers are generally cheaper than individual coverage and often provide enough coverage for basic needs. But, if you end up checking out your options and find that you’re not covered well enough, it may be better to investigate a standalone plan instead.
4. Hiding information from the insurance company
Hiding information from your insurance company doesn’t just mean lying on your application, such as lying about any possible pre-existing conditions that you may have. It also includes failing to tell the company about changes in your life, such as getting married or taking on a new job, or any other factors that could affect your coverage needs.
5. Being unprepared for your medical exam
Many people assume that, if they’re healthy and have no history of serious illnesses or conditions, their medical exam will be simple. But even the healthiest-seeming people may find that the exam is more comprehensive than they were expecting. During your exam, you’ll be tested for any health problems and asked about your family’s medical history. The last thing you want to do is make any mistakes or leave out important information during your exam, as it could mean you’re denied coverage.
