One of the most important decisions you'll make for the financial health of your family is which life insurance policy to purchase. It's important to avoid certain false moves when you select a policy that could negatively impact your family financially down the road.
The following are six things you should not do when it comes to life insurance.
Procrastinate Purchasing a Policy
One of the biggest mistakes you could possibly make is to put off purchasing a policy. If you delay purchasing a life insurance policy, your family is not going to be financially protected if something were to happen to you and your income was gone.
Purchase a Policy Before You Understand the Different Types of Life Insurance
There are numerous types of life insurance to be aware of. The biggest distinction to understand is the difference between term life insurance and permanent or whole life insurance.
Term life insurance is more affordable but doesn't accumulate cash value over time. However, term life is often the life insurance option of choice for many young families thanks to its relatively affordable cost and death benefit payment.
Not Calculate How Much Coverage Your Family Needs
You need to think ahead and imagine what expenses your family would face if you passed away unexpectedly and your family lost the financial support you provide. Purchasing enough life insurance coverage for your family's needs is essential to avoid financial hardship for your loved ones down the road.
Assume You Have to Purchase the First Life Insurance Policy That's Offered to You
When it comes to making a big investment like purchasing a life insurance policy, it's essential to consider the different options available to you. Compare different policies that are available to you both in terms of premium costs and the amount of coverage they offer. Then, choose the policy that will be the most beneficial for your family financially.
Misrepresent Yourself Or Your Health Conditions
Taking out a life insurance policy is stressful because future policyholders are usually required to undergo a medical exam. This exam determines any current health conditions that may affect eligibility and affordability.
However, those applying for life insurance should always answer health questions honestly. Misleading responses to health questions could compromise coverage benefits down the road.
Not Make Sure You Can Afford the Premium
Life insurance premiums are an expense that will need to be paid every month or pay period. Otherwise, the policy may be canceled. Consumers need to make sure that they'll be able to afford premiums before they purchase a policy.
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