Top 10 Mistakes Made When Buying Life Insurance

Delaying coverage leaves your loved ones at risk should something happen to you. Also remember life insurance premiums increase as you get older. If you delay and then your health declines at the very least, you will likely pay much higher premiums, or you may become uninsured. Delaying for any reason is risky financially and could mean coverage becomes limited or not available at all.

 

The Internet is full of online forms and calculators that rapidly provide life insurance quotes. These tools are handy for getting a ballpark estimate of what you might pay. But, it takes more to pinpoint the actual rate you are likely to end up paying. Your age, health, medical history, needs and budget must be properly assessed to get an appropriate amount of life insurance and term length. Something as important as life insurance should not be bought from a stranger who often isn’t even located in the same State as you are. Buy coverage from someone you can meet face to face and feel comfortable with, and who has been in business in the community for many years with a solid reputation.      

 

Policies are available for smokers and people with health issues. It is very important to be honest with your life insurance agent. It will help the agent to give you the information you need to get the appropriate coverage. The medical exam will reveal tobacco usage (including the nicotine used in transdermal patches). If you quit smoking or your health improves significantly after getting your policy, you can always speak to your agent to see if it’s possible to qualify for a lower rate.

 

 

Employer-provided life insurance is a wonderful benefit, but it should not be your only coverage. In most cases it doesn’t offer enough protection. It’s typically one that isn’t based on your specific needs. By having a personal non employer paid policy in addition you can secure far more coverage to protect your loved ones and tailor it to your specific life insurance needs

 

Many people think only in terms of insuring the family’s largest earner. If multiple family members work and their combined income is necessary to maintain things that must be considered in determining each person that should be covered. Also it is very important to recognize that a person maintaining a home and caring for a family has a significant financial value, even if they are not earning money. If an individual takes care of children or another person in the home, such as an elderly parent, the caregiver’s death could create unexpected – and significant – expenses. These costs can run for years and really add up.

 

Sometimes people buy term insurance and do not realize it is temporary, which is why it’s called “term” insurance,   it is issued for a set period of time. With longer life expectancies, today’s 20 25 and 30-year term policies are cheaper and more cost-effective than ever, and are great if you don’t need life-long or long term coverage, but many people have a long term need. For example, to ensure that a surviving spouse won’t lose the home while protecting the children from estate taxes. Some people truly need permanent protection. A capable agent should show you more than one option to determine what best for you.

 

Many people believe life insurance is only needed when there are families, that is not the case. Life Insurance can act as a great funding vehicle if something unexpected happens and you want to take care of people other than household members. Here are some areas for you to consider:

  • Dependents such as  siblings or other relatives
  • Estate Taxes for closely held business interests
  • Buy and Sell for business partnerships
  • Debts and obligations
  • Funeral costs/Medical bills
  • Charities/Philanthropic projects

 

How much coverage do you need and for how long? There are plenty of variables to consider. Coverage amounts of $250,000, 500,000 or even $1 million can sound like fortunes but if you are young with a family and something happens to you these aren’t high amounts. A capable life insurance agent can meet with you learn your unique situation and put together the right plan and options.

 

It’s smart to review your life insurance coverage in the same way you might review other aspects of your financial or retirement plan. The life insurance coverage that fit fine when you first got your policy might not be the best for your needs anymore. You might decide you need more coverage – or less. You could decide to convert your term life insurance policy to a permanent policy. As a rule of thumb review your coverage at least every five years with your Agent

 

When people buy life insurance coverage many times it is not enough coverage. Many people focus on the most obvious expenses, but depending on your situation that could result in being drastically underinsured. Here are some commonly overlooked expenses you should take into account:

  • Is there enough money to cover additional childcare costs?
  • Will your family require help to maintain the household?
  • Do you plan to pay for your children’s college education?
  • Do you want your family to be able to pay off your mortgage, or buy a home?
  • Will your family have health coverage – and money to pay for it – if you are suddenly taken from them?

 

Ensure protection and security for you and your family with a dependable quality life insurance policy from LJ Brudnick & Sons. Call us today at 617-889-1100.