Choosing a life insurance policy is one of the most important financial decisions you will make. After all, this policy is meant to protect the people you love most! As you consider the benefits of different types of life insurance, keep these common mistakes in mind so that you can make the smartest choice for your family.
Making assumptions. People tend to imagine that life insurance costs about three times more than it actually does! Don’t assume that a good policy is unaffordable; meet with us to get a real quote instead.
Relying upon your employer’s life insurance policy. It’s great if you are covered by a life insurance plan through your company, but you shouldn’t rely solely upon that policy to protect your family. You could lose your job, your employer could cancel the insurance, or it might be subject to strict limitations (such as you must die as a result of your work duties, for example). Get your own policy and you will always be protected as long as you make your premium payments.
Lying on your application. Sometimes people are tempted to lie on their life insurance applications, in order to achieve a lower premium. First of all, your insurer is probably going to double check with Medical Information Bureau reports to verify your information. Even if you don’t get caught upfront, your insurer will investigate your benefit claim in the event of your death. If they discover that you lied on your initial application, your family might not receive the payout from your policy.
Choosing the wrong beneficiary. Choosing a beneficiary might seem like a simple decision, but sometimes things aren’t so easy. You want to make sure that your benefit payout is set up properly so that it protects your family. There are many legal and tax regulations that can complicate matters, so make sure to seek expert guidance when you establish your policy.
Forgetting to update your policy. If you purchased a life insurance policy years ago, chances are good that it doesn’t offer you appropriate protection now. As life changes, you need to review and update your policy. We recommend doing this every two to three years, or immediately if you need to change beneficiaries, have a new child, or some other pressing need presents itself.
Underestimating your needs. You want to make sure your family’s needs are adequately covered in the event of your death. Don’t choose a number at random; let us run a needs analysis for you, so that you know exactly how much life insurance you really need.
Give us a call at 760.436.1711 to schedule an appointment.