Life Insurance Mistakes To Avoid
Do you know the facts behind life insurance? Do you know about the different types of policies, the costs, and most importantly what your needs are? You shouldn’t purchase a policy before you understand all of these facts. The most common problems with buying a policy involve not researching first. These are life insurance mistakes to avoid:
Not Understanding It
Too many people buy life insurance just because someone tells them they should. Or, they see it as a savings account. Life insurance is like a savings account, yes, but it’s designed to protect the people that you leave behind when you die. Understand that it is not meant to be an account that you can take money out of, it’s meant to be untouched other than when you pay your premium. After you die, your life insurance can help your family members pay off your debts. That’s why anyone with a long-term mortgage or a major loan that they can’t pay off will need more expensive life insurance.
Not Financially Preparing
Life insurance adds a monthly cost to your budget. Remember that in that sense, it works a lot like health insurance. If you’re only 26 years old, for example, and you’re just buying health insurance for the first time, you may want to wait a few years before you consider adding on a life insurance policy. It’ll take another chunk out of your budget.
Picking The Wrong Type
If you’ve still got a whole life ahead of you but you purchase a short-term life policy, you’ve been duped. Make sure you know the differences between policies before you purchase. Term policies are for selected time frames, while whole life is for your entire life. Final expense policies are designed to cover your funeral and final medical bills ONLY, while universal covers all expenses and includes a cash value.
Not Knowing Payment Terms And Dates
Not every policy’s payment method is the same. Know the facts: Does your policy require a monthly payment, or is it quarterly or yearly? What happens if you miss a payment? Additionally, know and make note of important dates. When are your payments due? Do you have to renew your policy at any given time?
Are you ready to purchase a life insurance policy for yourself or a family member? InsureTN can help you select the right policy. Call one of our licensed agents today at 615-964-5250.