There are a lot of choices to make when it comes to buying life insurance, and with so many options, it’s easy to end up with a policy that doesn’t fully meet your needs. Here are six mistakes to avoid when buying life insurance.
Relying Solely on Group Life Insurance
While group life insurance through your employer is often easy to qualify for, it doesn’t always provide the amount of coverage and options you need. The policy will only cover you for as long as you work for your company and relying solely on group life insurance might cause you to put off buying your own life insurance policy, which can result in more expensive coverage down the road.
Procrastinating to Buy Life Insurance
Life insurance is most affordable the younger and healthier you are. Older individuals can expect to pay higher premiums for both term life insurance and permanent life insurance. It’s a wise decision to lock in what you think you’ll need to cover not only current, but also future expenses.
Choosing the Wrong Type of Life Insurance
When choosing between term life insurance and permanent life insurance, you’ll want to assess what you want to get out of your policy. One of the biggest differences between the two can be cost. Term life insurance is the most affordable option, providing substantial coverage at often a low monthly (or annual) rate. Permanent life insurance is, therefore, the more expensive option, but has the perk of lasting your lifetime, so long as the premiums are paid.
Forgetting About the Future
Life changes frequently, which is why it’s important to consider not only your current financial responsibilities but also your future ones. If you’ve landed on a term life insurance policy, try to think ahead about any potential changes that could occur. Maybe getting married, growing a family, starting a new job come to mind; as your life changes, it’s important that your policy continues to reflect your needs.
Not Purchasing Enough Life Insurance Coverage
Since life insurance replaces lost income, the proceeds from your policy should be enough to cover immediate expenses as well as provide continuous income for your beneficiaries. Most people have no idea how much life insurance they need, but our insurance calculator can get you started on determining how much life insurance coverage would be right for you.
Forgetting to Shop Around for Life Insurance
Life insurance rates and coverage vary widely by company so exploring all of your life insurance options is important. Understanding the different options for life insurance can seem challenging, but at SelectQuote, we can make the process of finding the right coverage for you quick, easy and convenient. We can provide life insurance coverage and rate comparisons from some of the most trusted insurance companies in just minutes, and our goal is to help you find the right coverage with the right carrier at the right price for you.