10 Most Common Life Insurance Mistakes To Know Before You Buy
Life insurance is a very important arrangement and thus merits a lot of attention from both the company and the client. Sadly, proper information and due process are not things that are really that popular with a majority of people, and so a lot of mistakes end up happening. So to find out the 10 most common mistakes that can prohibit you from enjoying your insurance benefits, simply read on to learn how to avoid them.
1st mistake: Underestimating Security
Life insurance is composed of multiple processes that must come together in order for it to be completed, and among these processes is the giving of your personal information. Now please take note that in order for your life insurance policy to become legitimate, the information you give must be honest and must be composed of accurate details. However, the importance of your personal information can be used in order to steal your identity.
Solution:
For a solution on how to avoid having your identity stolen, folks should bear in mind that thieves can only get your identities in unsecure places. So it really is best to either go to the insurance company itself to process your life insurance or verify the identity of agents through calling the company and asking about them, as well as checking their ID cards for company and government accreditation.
2nd mistake: Underestimating Insurance Benefits
A lot of people become insured for no other reason than because they think they are supposed to be or they were forced to be, and not because they understand what they get out of it. Needless to say, not knowing the kinds of Insurance Benefits you can get can lead to some serious trouble later on and would be best avoided by being more informed.
Solution:
Research is your best friend here if you managed to conjure up enough interest to find out what exactly life insurance or any insurance policy can do for you. You would be surprised at how much help they can be on occasions other than your death or the destruction of your property.
3rd mistake: Estate As The Beneficiary
For those who are getting a life insurance policy in order to secure the future of their estate properties, it might sound like the best idea in the world to make your estate the beneficiary for the death benefits. But this can prove to be a costly mistake since estate finances are subject to all sorts of taxation which can reduce the money you meant for securing it into but a sliver of its former figure.
Solution:
Now naturally, the cause for your getting such a policy is to secure a piece of property for people you care about to make use of. This therefore makes the solution very easy since you would just have to name them the beneficiaries so that they can take care of the estate without all the tax deductions.
4th mistake: Just One Beneficiary
Since life insurance involves years of existence, it could prove troublesome if your single beneficiary dies before you. So it is never a good idea to name just one beneficiary.
Solution:
Name more than one of course. Having two is best.
5th mistake: No Policy Update
Time moves, but your policies will not if you do not update it. New developments can seriously mess up your arrangements after all.
Solution:
Keep in contact with your insurance agent and tell them anything major that happens in your life.
6th mistake: Just One Policy
Being thrifty is great since the economy is bad. But you should also bear in mind that just one policy might not provide enough protection for you and your family.
Solution:
Review every single policy you can think of and compare them with each other to see which you need and which you can live without. Covering your bases might seem old-fashioned but it is necessary.
7th mistake: Wrong Policy
Please do remember that though life insurance will essentially give your life coverage, different policies go about it differently. As such, choosing the policy that does not fit your circumstance can go very wrong.
Solution:
Always make sure to review your own situation and need to determine what kind of policy you should have. From there, proceed to find a policy that fits and get that.
8th mistake: Using Inconvenient Agents
As sad as it might be, some agents working for certain companies are pressed to sell whatever it takes. As such, they might push for a policy that is not right for you just to make their quota.
Solution:
This easiest thing to do here is go for independent agents that have no company exclusivity.
9th mistake: Inadequate Insurance Amount
Death benefits of life insurance policies are meant to secure families. But if the amount is not enough, they will hardly be any better without the death benefits to begin with.
Solution:
Calculate and take into consideration everything that your policy is meant to cover. You can even ask agents to do this for you as long as you give them all the right information.
10th mistake: Companies Are All The Same
Finally, we have the mistake of thinking that all insurance providers are the same. In actuality, hardly any of them is and there are the best and the worst among them.
Solution:
Make use of company reviews, ratings from rating companies and just general research.
In the end avoiding all of these life insurance mistakes comes down to doing your research ahead of time. With that said pick a policy that you feel comfortable with not your insurance agent, after it’s about protecting your loved ones. So take some time and talk to a local agent today.
