Even though you are paying the premium of your life insurance policy, chances are high that your invested money can possibly go worthless if you commit the below mistakes. Read about the top mistakes you should not be making when buying a life insurance policy.
If you think you’re young, strong and healthy and do not need a life insurance policy at this age, then you are wrong. It is important that you are prepared to face all the unexpected events that can even lead to your death. Additionally, if you have a family to take care of, then starting out early is a must. When you buy life insurance at young age, you should know that it will cost you less premium as you are less likely to be affected by lifestyle related illnesses. Also, know that by investing in life insurance policies, you can save taxes up to 1.5 lakh under section 80C of the Income Tax Act, 1961.
Not informing your family: Remember, you are buying a lie insurance policy not just for yourself, but primarily for your family. They are the ones who would be eligible to receive the sum assured in case of your untimely death. And they are the ones who would be initiating the claim on your behalf. So if they are not informed, how would they know about the policy and make the claim? Not keeping the family informed is a wrong decision and in the end the insurance company would be the only beneficiary to get the claim amount. Hence, it is important you keep your family informed about your life insurance purchase.
If you think that by investing in too many life insurance policies, you are doing a great thing, then you should know that you really aren’t. By over insuring yourself, you are just giving rise to too much expenditure losing an opportunity to invest in other products. Also, keeping a track on too many premium payments is cumbersome and can actually lead to policy lapse in some cases.
If you are thinking to keep your minor child as the nominee, then you are doing wrong. Minor’s absence won’t do any harm to the family financially. Your family would not be entitled to receive the claim until the minor turns 18. Your family would be left stranded without any direction.
If you are investing in a life insurance plan that is offering you a low premium rate, then you are committing a mistake. When investing, its important that you look at the coverage offered by the insurer. See if the coverage amount would be able to meet the lifestyle expenses of your family. Also, consider the inflation factor when choosing the coverage. Look if the insurer is offering you any additional riders to enhance the coverage of the life insurance plan. Before deciding on a cheaper policy, always compare life insurance plans online as by doing so you can insure your life with the best plan and can also get discounts.
When buying a life insurance plan, assess your requirements, risk profile and income. Simply don’t go by the talk of the agent as you may end up making a wrong purchase. Remember, agents earn commission on every policy they sell. Hence, always do your own research, read the terms and conditions of the policy and only then make an investment.
Make every penny count and avoid committing the above mistakes to protect your family from financial distress in the future.
Life Insurance is getting financial security for your family in an unpleasant event of your death. Check how different insurance plans can be used as an effective investment tool.