- How to avoid mistakes when buying life insurance
- March 24, 2014
Some people shy away from the sometimes morbid task of securing a life insurance package, often leading to mistakes when choosing coverage, according to USA Today.
Relying on employer-provided insurance could ultimately be costly as those policies generally pay a death benefit of $10,000-$25,000, usually only enough to cover funeral expenses. People who are young and in good health will often find better rates and coverage with an individual policy, according to the paper.
Buying packages from weaker companies because of lower rates can also be a fatal mistake, Martin Weiss, president of Weiss Ratings, told the paper. Consumers should be aware of a company’s safety and financial standing, as struggling company’s are likely to delay or obstruct the claims process, he said.
Finally, lying about health conditions or risky hobbies can be devastating as insurers could potentially deny a claim based on fraud, or lower the policy’s death benefit.
Although many assume life insurance is only necessary for people with spouses or children, anyone who has someone in their life who could suffer financially in the event of their death should consider purchasing a policy, according to the Life and Health Insurance Foundation for Education.
Purchasing additional protection can continue a family business if owned and help pay off debt including a mortgage and credit cards so that family members do not have to assume that responsibility. Term is the most affordable and pays for a specific time period. You can request coverage when specific debt is paid off so term offers flexibility and that added coverage that employer insurance just does not provide.
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