While it may be uncomfortable to think about, it is important to really consider investing in a life insurance policy. A life insurance policy will not only ensure your family and loved ones are protected after you pass on, but it will give you peace of mind in the present. But, like so many other types of insurance, choosing between different life insurance policies can be confusing. It is easy to make a lot of mistakes, but because there is so much at stake, it’s important to make the right decision for your family’s needs.
To that end, we have created a list of common mistakes to keep an eye out for when choosing the best life insurance plan for you.
Mistake: Only investing in group insurance
Group life insurance is what most employers offer as a benefit, and many people invest in these policies simply because they make sense at the time. But most of the time they don’t have the highest coverage, and they will surely end if you ever leave the company or retire. That’s why it pays to have a supplemental individual plan as a backup in case anything happens.
Mistake: Waiting too long
A lot of Americans wait too long to look into different health insurance policies because they think it will be expensive. But in reality, life insurance policies can be purchased at almost any benefit increment, from a couple dollars up to a thousand. However, the longer you wait to purchase life insurance, the more expensive it will become. With each passing year, you waste another opportunity to secure affordable premiums and generous benefits.
Mistake: Naming a minor as a benefactory
Unfortunately, a minor is not able to be a benefactor until they have reached the age of 18. So if you would like to leave your estate to a minor, it is a good idea to name a guardian to take responsibility for the money in the meantime. Additionally, you’ll also be able to create a life insurance trust that they can access once they come of age if need be. If your children are not yet adults, it’s important to come up with a clear plan in the event of your passing.
Myth: Keeping your policy a secret
Your family deserves to know everything that is going on with your estate, so do not keep it a secret from them. Too many people feel that life insurance coverage should be kept from their partner. If you do so, this can just lead to confusion in the long-term. Purchasing life insurance policies is a wise, and common, decision to make. Don’t hesitate to be honest with your spouse, children, or other family members about your decision.
In our next post, we will go over additional mistakes to avoid when it comes to choosing the right life insurance polic