Top 6 Common Mistakes People Make When Purchasing Life Insurance

Buying life insurance might seem overwhelming at times. Many people are afraid of making a mistake when purchasing coverage. Fortunately, we have listed the top 10 mistakes people make when purchasing life insurance to help make your investment in your family's future fast and easy.

#1 Procrastinating or Waiting to Obtain Coverage
Delaying coverage leaves your loved ones and assets vulnerable not to mention that life insurance premiums increase as we get older. If your health declines, you may pay more as well - assuming you can still get coverage. Delaying for any reason is risky financially and could mean coverage becomes limited or not available at all.

#2 Trusting Quick Online Quotes
The Internet is full of online forms and calculators that rapidly provide a life insurance rate quote. These tools are handy for getting a ballpark estimate of what you might pay. But, it takes more to pinpoint an accurate rate. Your unique situation, age, health, medical history, needs and budget must be properly assessed to get an appropriate amount of life insurance and term length - and an accurate rate. Plus, only a licensed life insurance agent can provide you with an accurate rate (based on your health profile) and sell you life insurance.

#3 Purchasing Unsuitable Coverage
How much coverage do you need? For how long? There are plenty of variables to consider. Coverage amounts of $250,000 or $1 million can sound like fortunes. Unfortunately, some people discover too late that the money didn't cover everything they had intended. It's important to figure out your current expenses and do your best to accurately assess future ones. A licensed life insurance agent can help at no cost to you by using a fact-finder.

#4 Neglecting to Periodically Review Your Policy and/or Needs
It's smart to review your term life insurance policy in the same way you might review other aspects of your financial or retirement plan. The life insurance coverage that fit fine when you first got your policy might not be the best for your needs anymore. You might decide you need more coverage - or less. You could decide to convert your term life insurance policy to a permanent policy.

#5 Relying Solely on Employer Coverage
Employer-provided life insurance is a wonderful benefit, but it can be risky to rely on it as your only coverage. In many cases, it simply doesn't offer enough protection. It's typically considered a general perk - one that isn't based on your specific needs. By having a personal term life insurance policy, you can secure enough coverage to protect your loved ones and tailor it to your specific term life insurance needs.

#6 Assuming Smokers or People with Health Problems Cannot Get Coverage
Policies are available for smokers and people with health conditions, but it's important to be honest with your life insurance agent.  It will help the agent to give you the information you need to get the appropriate coverage.  The medical exam will reveal tobacco usage (including the nicotine used in transdermal patches).  If you quit smoking or your health improves significantly after getting your policy, you can always speak to a life insurance professional to see if it's possible to qualify for a lower rate.