5 Mistakes to Avoid When Buying Life Insurance

by Micheal M. I'm a professional Writer

In 2018 alone, 27.8 million life insurance policies were sold in the United States. Needless to say, life insurance is quite popular in the United States.

However, not all life insurance is equally as beneficial. Unbeknownst to many, there are numerous unscrupulous life insurance companies that will to sell you detrimental life insurance policies.

Here are a few mistakes you should avoid at all costs when buying life insurance.

The Mistakes

The object of purchasing a life insurance policy is always to secure a family’s financial future. However, these mistakes can turn the tables on your wishes pretty quickly:

1. Not knowing why you need it

The first question you should be asking yourself is this: what purpose is this policy going to serve? Do I really need it? A needs analysis, in other words, needs to be performed.

2. Not providing the right information

Be sure you’re providing all the right information—such as your health status, age, and so on. If you provide incorrect information, the claim can be rejected, or your policy may be revoked at a later date.

3. Not going through all the details

Read the life insurance contact form thoroughly in order to avoid being hoodwinked. Once you have the policy, mull over it. Make sure you understand all the details. If you find that what you have been signed up for and what you requested are diverging, you can ask for a refund.

4. Not telling your family

The policy is for your family after all. So make sure you’re discussing it with your spouse and other family members. Also ensure that the bond remains with a trusted family member.

5. Not keeping up with the policy

If you don’t keep up with your part of the bargain—such as paying premiums or surrendering your policy—your policy might lapse. The biggest mistake people make when it comes to life insurance policies is missing premium payments.

Why Buy Life Insurance?

Life insurance ensures that your family isn’t left helpless in the event of your demise. Even after your death, they will have the financial stability to continue to pay off debts or keep up with expenses. This is the major reason why people opt for life insurance.

But there’s another way in which life insurance can help people. It’s called life settlements. When you sell off your life insurance policy (that is, if you qualify), you are paid in cash. This is a viable option for people who no longer need their life insurance policies—such as people whose children can fend for themselves or those who are in dire need of money.

Either way, buying a life insurance policy is always a good idea.

How to Sell Your Life Insurance

First, you’ll have to find out if you qualify or not. If you do qualify for a life settlement, you can use this free life settlement estimator to get an estimate of what your policy may be worth.