5 Life Insurance Mistakes To Avoid
Life insurance can help ensure your family’s future financial security by providing funds to pay the mortgage & other debts, replace lost income, cover college tuition or trade school, take care of final expenses and transfer wealth.
We want to ensure that you are getting the most out of your life insurance so we rounded up the top 5 life insurance mistakes to avoid.
5 Life Insurance Mistakes To Avoid
Fail to Purchase Enough Coverage:
Life insurance only serves its purpose when you have the right amount of coverage. A popular rule of thumb; coverage equal to 10-12 times your annual income. Be sure both spouses/parents in your family are covered.
Waiting too Long to Purchase Life Insurance
This can put your family at serious risk. Additionally, purchasing life insurance earlier in your life can save you money, as rates typically increase with age. Health issues that may arise can increase your premium significantly or even have your insurance application denied.
Choose too Short of a Term
Purchasing a shorter and less expensive policy may sound appealing, but it could hurt you in the long run. For example, if you buy a ten-year policy and, in ten years, you develop medical issues – that could raise the cost of your next plan. If you are planning on children in the future a 30-year plan makes sense. If you already have children and not planning on more, a 20-year plan would likely meet your needs.
Purchase too Many Riders
Most riders are low on value and high on cost, benefiting no one except the insurance companies who receive the extra premiums. Common term life insurance riders include income replacement and waiver of premium.
Waiting too Long to Review your Policy
The policy you purchased 10 years ago may have been a great fit then, however does not reflect where you are in your life today. Life events like having a baby, getting a raise at work, or quitting smoking would be great reasons to look over your policy again. A good rule of thumb is to review your policy every couple of years.
When it comes to your life insurance we want to help ensure that you have all of your bases covered. Starting with these 5 mistakes to avoid you are well on your way. Have more questions or want to schedule an appointment?