7 Life Insurance Mistakes to Avoid

by on November 11, 2010

Many people find insurance to be unnecessary and consider it to be a waste of time and money. Whereas, others feel that the very thought of life insurance was depressing as it made them think about death. However, what people don’t realize is that life insurance happens to act like the sole protector for the people who depend on you, if something untoward happens.

There are a few things that people need to remember, when it comes to life insurance. Though, they are only a few pointers, still they can go a long way in addressing your doubts about insurance. A few errors that people happen to make, when thinking about an insurance are:

Too much is never enough

A recently conducted survey has found that usually, middle income Americans believe that they do not require insurance, as they already have enough to take care of their children. Most of the respondents in the survey felt that insurance should be just enough to pay debts and pay-off the funeral expenses.  Apart from that, it was also found that around one-third Americans, don’t happen to have any kind of insurance, truly, a very sad state of affairs.

Talking about Death sends them the Shivers

Another commonly occurring problem is that the very mention of death among people, send them into an uncomfortable zone. Some people just don’t happen to insure their family because of unpleasant thought. Now, that would be the most immature thing to do, remember before thinking about death, think about your family and you children and the people, who would lose support, if you are not there.

Reliance on Conventional Methods

It is hard to understand that why people living in the year 2010 happen to be still applying old conventional methods of calculating there need of insurance. In earlier times, people used to multiply their income by 7 to 10 to ascertain the insurance they need, however they have forgotten that everyone has different needs. A family can comprise of one child and another family can comprise of five children, both of the families would need different plans, rather than the same.

The need to Calculate Perks

It is a common practice among employers to pay for health insurance of their employees. However, while taking into account the amount of insurance required, this aspect is completely ignored by people. So make sure, that your insurance is able to cover your wives health insurance as well, because if you are not there, your employer won’t be paying for her medical insurance.

Time is of Importance

Time and again people need to ensure that their life insurance is able to take care of their family, till the time they are capable of managing their own affairs. For example, a 10 year old child would require a cover for at least the next 15 years.

Costs of Insurance

Though, insurance does take a considerable amount of money as premium. One should always know that there is no need to be a miser, while keeping in mind the welfare of your family. Paying a little extra would always get you something extra; think about it as a future investment rather than a useless expense.

Failure to Update Policy with the Passage of Time

It is very important to update your policy, with the due passage of time and changes made in the family. Marriage, divorce and birth of a child, are important stages, when one should change their policy, as the need of a more suitable plan is required.

Insurance policies are an important part of life, though sometimes you might feel that the premium going out for insurance is just a useless expenditure. But, before you withdraw from a plan or think about not taking up insurance at all, you need to think about your family and what would their situation be, if they happen to know, they never had a back-up.

(photo credit: Inmagine)

{ 1 comment… read it below or add one }

Donald Quixote August 28, 2013 at 11:19 am

Sounds like you need to keep on your toes. Adjusting your policy, making sure you are covered, getting insured on time all require alertness…the instance of people not seeking insurance because they do not like to think about bad things happening is ridiculous and irresponsible.

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