In the previous blog I discussed the importance of life insurance and why you need it. Now I would like to point out some common mistakes and misconceptions.
Here are the most common:
- Not purchasing while you are young and still healthy.
- People tend to think they are too young for life insurance. Remember, some determining factors on premium are age and health.
- Not updating policies or paying attention to term conditions.
- You may need to update beneficiaries due to; marriage, death of beneficiary, divorce, or children getting married.
- Term policies expire. You need to pay attention to when this will happen to avoid being without life insurance. Term policies can be converted to a permanent policy.
- Taking out loans against the policy and not paying them back.
- Not paying back the loan will decrease the death benefit, or possibly accelerate a lapse.
- Also, if the yearly interest amount isn’t paid, this amount will be added to the loan balance.
- Thinking that life insurance through work is all you need.
- In most cases, you cannot take this policy with you when you leave the job or retire.
- Most people do not know how much life insurance coverage they have at work; the amount may not be enough should something happen to you.
- Not purchasing enough life insurance for their needs.
- Your needs should be evaluated.
- You and your significate other should discuss and create a plan that involves the present and future needs.
- Things you need to consider; estate planning, long term care, final expenses, beneficiary’s needs, and amount of debt to name a few.
Consulting with your advisor could help eliminate some of these mistakes and misconceptions.
– Nancy Zimbardi –