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COMMON LIFE INSURANCE BLUNDERS - AND HOW TO AVOID THEM

Nobody likes to shop for life insurance, and it is true that this purchase can be fraught with financial peril as well as emotional baggage. Even so, it is important for every individual to consider his or her insurance needs carefully in order to protect their family and all they have worked so hard to obtain. Living without life insurance can leave your family vulnerable and cause serious financial hardship in the event of your untimely demise.

When shopping for life insurance it is important to avoid some of the most common mistakes other shoppers have made. A life insurance policy can be a complicated purchase, and it is important to carefully consider all of the options before making a final decision.

One mistake that life insurance shoppers may make is falling into the temptation to lie on the insurance application, or at least omit some unpleasant truths about their health and lifestyle habits. For instance, life insurance companies routinely offer preferred rates to policyholders who avoid smoking and other unhealthy habits. Claiming to be a nonsmoker while nurturing a pack a day habit could come back to haunt your family later on by causing the death benefit to be denied. It is better to be upfront and honest on the applications and then compare premiums among several different companies in order to get the lowest monthly premium.

It is also a good idea for first time purchasers of life insurance to get a complete physical before they apply. Knowing your state of health going in can help you get a better rate and ensure that the application is completed properly. Most insurance companies will require a physical as a condition of insurance, and some will require a follow-up examination in order to approve a significant increase in coverage. It is a good idea to beat them to the punch by having a complete physical workup done by your regular family physician.

Many first time life insurance shoppers also go in not knowing how much coverage they really need. While there is no one answer for everyone, it is important to consider a number of factors, such as family size, annual salary, the amount remaining on the mortgage and the income needs of the family. Having these figures available will make it much easier to determine exactly how much cover is needed. Some families will need life insurance cover for a specific purpose, such as paying off the mortgage, while those households with young children may need enough cover to provide the family with a reasonable monthly income until the last child has graduated from college. It is important for every life insurance shopper to look carefully at his or her specific situation in order to get the best coverage for the lowest possible price. To take a typical example, Insurance Companies actually offer two distinct forms of life insurance – typical cover which will give your family a cash lump sum or Mortgage Life Insurance which will pay off all or part of your mortgage repayment.

As with any form of insurance it's a good idea to shop around for the best deal. These days however a number of big insurance providers will effectively search the market for you sourcing their products from a wide range of insurers so that when you get your quote you know it's the best deal from a diverse pool of policies.



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