Errors People Make When Purchasing Insurance Policies
Financial plans can be scuttled by any catastrophic loss, bringing your savings down to its knees. In order to protect yourself against sudden death, loss of earning power, loss of earning power and medical cots you need an insurance policy.
When it comes to insurance coverage, many people are basically left in the dark and worry that they’re not properly insured, however, they’re concerned that they won’t be able to afford any additional insurance coverage. Contrarily, they might not be aware of where they can turn to for answers on their insurance questions.
Whether the situation is warranted or not, many people have an inherent distrust of insurance agents when they’re asking for information. The reason is that they believe all insurance agents live on the “if you can afford what you currently have, then you simply do not have enough” credo.
If your family is dependent on you for your earning power than life insurance is important for you to have. You’ll need to have the life insurance policy in order to replace the income you bring in and provide the benefits your income is providing, including:
- Education Expenses
- Retirement Benefits
- Living Expenses
Life insurance is able to provide the money needed to pay debts like your homes mortgage off should you pass. Additionally, it can provide money to pay administration costs and estate taxes. With that being said, not everyone needs to have a life insurance policy. The following are six of the most common mistakes people make when it comes to life insurance, spending unnecessary money on coverage they don’t need to carry.
Purchasing a life insurance policy if you don’t have any dependents as there are very limited reasons why you’d ever need to purchase insurance coverage if you’re footloose and single.
Purchasing life insurance on your kids is something that’s also unnecessary. Obviously the death of a child would be a complete tragedy; however, you won’t be suffering financially should they pass.
Unless you’re shopping for the best possible rates, purchasing any mail-order insurance policy is not advised.
Purchasing any investment insurance policy, such as, variable or universal life rather than making contributions into your retirement plan. Contributions into your retirement plan are tax deductible, however, your investment insurance isn’t.
Overlooking disability insurance can be a catastrophic error. Your financial health is something that, if your family or yourself are dependent on your income, can be disastrously affected if you don’t look into and purchase a disability insurance policy. You’re 5-6xs more likely to become disabled than to die at almost any age.
Purchasing expensive life insurance policy riders is often unnecessary. Riders, such as, accidental death benefits, waiver of premiums and the purchase of additional purchase options are simply too costly and more than often not worth the extra cash you’d be spending.
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