7 Common Life Insurance Mistakes To Avoid

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Life Insurance
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Common Life Insurance Mistakes To Avoid
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• According to a Bank rate Money Pulse survey from
  June 2015, nearly 50 percent of households dont
  have any life insurance to speak of. Among those
  who do have it, nearly half are underinsured.

The survey also notes that many policyholders
dont understand how much life insurance they
need or how much they should be paying, which can
lead to serious mistakes during the buying
process. Here are seven of the most common
mistakes to avoid before, during and after you
buy a life insurance policy.
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• Being less than honest on your application. It
  can be tempting to provide misleading personal
  information on your application to try and
  receive a better premium. However, doing so could
  put your familys financial security at risk.
  Its important to be completely honest on your
  application, because false information can lead
  to inaccurate quotes and, even worse, grounds for
  a life insurance company to deny a claim.
•  Procrastinating. The younger you are and the
  better your health, the more affordable your life
  insurance premiums are likely to be. As you age
  and become more susceptible to medical conditions
  and lifestyle- or work-related accidents, your
  life insurance rates will only increase. Thats
  why waiting until you are older to buy a policy
  can harm you and your family.

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• Miscalculating your coverage amount. Failing to
  purchase an adequate amount of life insurance
  coverage can severely compromise your familys
  financial future in the event of your passing.
  Thats why it is so important to take the time to
  calculate how much your dependents would actually
  need to cover ongoing expenses such as food,
  clothing, mortgage payments, debts, education,
  and healthcare.
• Relying solely on group life insurance. An
  ancillary mistake to miscalculating your coverage
  amount is relying solely on a group life
  insurance policy. While group life insurance is a
  wonderful employee benefit, the coverage amounts
  that most employers provide arent enough to
  protect your family for more than a year or two.
  Moreover, most group life insurance policies
  terminate if and when you leave the company.
  Thats why it pays to have an individual life
  insurance policy, which will protect your
  dependents for as long as you pay your premiums.

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• Failing to properly designate a
  beneficiary. Beneficiary designation is a crucial
  and often overlooked aspect of buying a life
  insurance policy. Naming a minor or your estate
  as a beneficiary can lead to delays in claims
  processing, not to mention attorney fees, court
  costs and interference from creditors. Forgetting
  to update your beneficiary designations after
  major life events like marriage, divorce or
  having a baby can also threaten the financial
  security of those you leave behind. Thats why
  its a good idea to consult with an attorney who
  is familiar with wills, trusts and estate taxes
  before designating a beneficiary for your life
  insurance policy.
• Forgetting to update your policy. Chances are
  your life insurance needs will change over the
  lifetime of your policy. Milestones like
  marriage, divorce, having children, changing
  jobs, and moving into a new home can have a
  profound effect on how much coverage you need.
  Typically, a family with young children will
  require more coverage than a retired couple whose
  children have long since left the nest. To
  prevent overspending and ensure your family is
  adequately protected, take the time to
  periodically reassess your life insurance needs.

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• Buying a policy without shopping around. Your
  premium for the same amount of coverage can vary
  by hundreds of rupees depending on the life
  insurance company you choose. Thats why its so
  important to comparison shop multiple insurance
  companies to find the right policy at the best
  price for you.
• Source http//www.selectquote.com/blog/2016/01/21
  /seven-common-life-insurance-mistakes-to-avoid/

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