Avoid These Life Insurance Mistakes

You want to protect your family’s financial future, but shopping for life insurance can be a bit confusing. Since insurance policies are never one-size-fits-all, you will need to do some careful research and comparison shopping. Just remember to watch out for these common life insurance mistakes.

Neglecting to perform a needs analysis. Knowing you need life insurance is only ten percent of the battle. How much do you need? Which type of policy? Choosing the wrong type of life insurance policy, or purchasing the wrong amount of insurance, can be a big mistake. That’s why your insurance agent will most likely ask you to fill out a needs analysis. Don’t skip this important step. There isn’t a single life insurance policy that is right for everyone, but there is one that is perfect for you.

Failing to compare premiums. Many people assume that a life insurance policy is similar to other products, in the sense that policies of the same type and value will be priced almost the same. Actually, since insurance rates are calculated based on your risk, you may find that rates vary considerably. This is because different insurance companies calculate risk using slightly different formulas. Your policy should suit both our needs and your budget, just like anything else you would purchase.

Forgetting to reconsider your policy. Unfortunately, you can’t just purchase a life insurance policy and then forget about it forever. As you age, so does your lifestyle and personal circumstances. There will be times in your life that a different policy or coverage amount will match up better with your needs. Every two to three years, redo your needs analysis to make sure your policy still fits you. You can always make changes as needed in order to provide your family with security.

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