Our attorneys only get involved when your life insurance claim is wrongfully denied, but we believe it is important to make smart choices about life insurance from the very beginning. Below, we’ve listed five common mistakes related to buying life insurance policies. Avoiding these errors can make it more likely that your loved ones get the support they need in the event of your death.
Pitfalls to Avoid When Purchasing Life Insurance
- Not getting enough coverage. Yes, it is cheaper to get less coverage, but will you be leaving your beneficiaries enough to continue to live comfortably for years after you are gone? Sit down with a calculator and think about how much income you bring to the family, how many services you provide (such as childcare or cleaning) and how much debt are you leaving behind?
- Getting too much coverage. Life insurance should protect your family from financial insecurity after your death – it does not need to make your family feel as if they have won the lottery. Choosing too much coverage can mean paying uncomfortably high premiums – and perhaps letting your policy lapse.
- Not shopping around for policies. You shop around when you are looking for a pair of jeans or even a gallon of milk – why wouldn’t you shop around when it comes to something as important as a life insurance policy? Compare quotes to get the best deal with the most reputable company.
- Not reading the policy closely. Know what you are buying. You would take a car on a test drive, and you would get a home inspected before buying it. Even though it can be dense, be sure to read and understand the contract you sign with your insurance company!
- Waiting too long to buy a policy. Are you putting off buying a life insurance policy? Not only are you risking your family’s security in the event of your death, you are also (we are sorry to say) getting older by the minute – insurance premiums only go up as you age. Act now to secure a decent price and to protect your family.
Understanding insurance policy claims can be very tricky. If you have questions, reach out to an experienced attorney for the answers by connecting with Bill Voss on LinkedIn.