Buying Life Insurance? Avoid These Mistakes

Buying life insurance is never easy, as you may find yourself pulled in two different directions.

On one hand, you want to put a lot of time into the process because you understand how important it is to purchase the right policy.

On the other hand, who really want to think about what will happen when they pass away?

Below are five of the most common mistakes people make when buying life insurance:

1. Neglect to Learn About Each Type

There are multiple types of life insurance, with these among the most commonly purchased:

•    Term life
•    Whole life
•    Universal life

All of these have a unique set of features and benefits, so it’s important to compare them before buying.

For example, term life is typically the most affordable option; however, it only remains in force for a predetermined period of time.

Whole life is more expensive, but there’s a guaranteed death benefit.

And with universal life, there’s permanent coverage alongside a cash value and investment element.

2. Not Enough Coverage

It’s okay to shop with the idea that you have to stay within budget. You don’t want to purchase a policy you can’t comfortably afford.

But, it’s easy to focus so much attention on the cost of coverage that you overlook what you’re getting in return.

If you don’t buy enough coverage, your loved ones may not be as financially secure as you would like upon your death.

3. Wait Too Long to Buy

It’s advantageous to purchase life insurance when you are young and healthy. It’s at this time of your life that you’ll qualify for the lowest premium possible.

The longer you wait the older you get. And the older you get the more you’ll pay for coverage. Also, you run the risk of applying when you’re not in good health, which will also result in a higher than average premium (or even a denial).

4. Neglect to Shop Around

There are hundreds of life insurance companies selling a variety of products. Don’t spend all your time with one company, as doing so could lead you to miss out on the perfect policy.

It may be time consuming, but receive a quote from a minimum of three to five companies. This will give you a clear idea of what each one offers, from the features of the policy to the premium.

5. Ignoring the Power of the Internet

There used to be a time when buying life insurance meant contacting insurers direct or using a broker. While these options still exist, the internet has changed the industry for the better.

You now have the opportunity to quickly learn more about every life insurance company, as well as its products. You can also request a quote, ask questions, and compare your options.

Do you have any experience buying life insurance? How were you able to avoid these mistakes?