Life insurance is one of the policies, along with medical and business insurance, that are most commonly purchased. Designed to protect one’s beneficiaries from any financial difficulties in the event of their passing, life insurance is an important part of any financial plan and security.
Like any other purchase, learning more about the product by researching and asking questions about it helps ensure that you’re making an informed decision. Because life insurance serves as a pillar of security for those who depend on you, it’s prudent to begin planning for it as early as you can.
Buying life insurance has also become more of a priority given the events in the past year and so. With many breadwinners and family members succumbing to the coronavirus, there is an increased awareness for adequate protection, especially with products that ensure security. However, with the number of options available on the market, sieving through the various options available can be a challenging task if you’re new to it.
Culminating from a combination of preconceived notions about the kind of life insurance product you need, mismatched expectations, or lack of information, you might be looking at the wrong products unknowingly. Recognising the common mistakes made can prevent you from repeating them when you make your own purchase.
1. Waiting too long before you purchase life insurance
One of the most common mistakes, applicable to many other insurance types, is waiting too long to buy the policy. There could be a range of reasons behind this delay. Young people with various other financial priorities such as student loans may put off buying life insurance until they’re in their mid-30s or have kids. But, it’s important to realise that insurance premiums climb as you age.
Similar to many other insurance types, the premiums payable for the policy are generally much lower the younger you are. On top of the added cost of higher premiums, you also run the risk of other variables running amok. For instance, developing a serious health condition could also render future premiums to be more expensive, raising the premiums even higher.
2. Relying on group life insurance provided by employers
Most employers insure their employees under a group life insurance plan. However, it’s good practice to review and re-evaluate the coverage afforded by the company. Most of the time, it may not be adequate. Additionally, group life insurance policies aren’t portable – so, if you leave the company, you won’t be able to keep your insurance.
Where you’re working might be a temporary fixture, but your policy shouldn’t be. For this reason alone, it’s a good idea to invest in a personal life insurance plan so that your beneficiaries are financially protected should anything happen to you.
3. Not setting up beneficiaries properly
One of the most important parts of setting up your life insurance, or any other policy for that matter, is proper set-up. A proper set-up includes vital information such as nominees and beneficiaries as well as the name of the person who will own the policy.
Not only will you gain a peace of mind, you will also ensure that the planned purpose is executed well. Some questions to consider include:
- Who are the beneficiaries and are they a minor?
- Will you have 1 or multiple beneficiaries?
- Are you using a trust?
4. Buying a life insurance policy on impulse or without sufficient research
A life insurance policy is one of the bigger life commitments. It makes prudent sense to shop around before settling on a policy. Pricing and model may vary across providers so it’s crucial that you do your research before signing the papers. You don’t want to run into a situation where you’re either over- or under-insured.
Working with Expat Insurance means you get access to a broker who will do the shopping and navigation for you so you can sit back and simply make the decisions.
Start on the right foot
Seeking the services of experienced brokers like ourselves can ease the process of finding comprehensive life insurance cover for you and your loved ones. Consult the expert advice of Expat Insurance and explore other crucial options like hospital and critical illness insurance plans for a secure future.