Avoid These Common Life Insurance Mistakes

Avoid These Common Life Insurance Mistakes

Don’t make these mistakes with your life insurance.

Because many adults know that they need life insurance, some rush into decisions without learning more about the coverage.  As a result, they make costly mistakes.  To ensure that you don’t make missteps with your coverage, here are some of the common issues to avoid.

  • Selecting the Wrong Type of Policy

There are two main types of life insurance, term and permanent.  Term life policies offer life insurance coverage for a set amount of time, usually 10-30 years.  During your term, you will pay your premiums and, if you pass away, your beneficiaries will receive a pre-determined payout.  Permanent life insurance policies offer life insurance coverage that spans the entirety of your lifetime.  As you pay your premiums, your policy develops a cash value that grows over time.  You can borrow against your policy’s cash value as a quick way to secure emergency funds. Because permanent life insurance policies are more complicated to manage and more expensive, term life policies are usually the best option for families.  Permanent life insurance policies are better suited for wealthy individuals looking for an investment opportunity or people with a lifelong dependent, such as a child with special needs.

  • Delaying Life Insurance

Most people put off getting life insurance when they are young and healthy.  However, this is obviously risky because it leaves your loved ones in a financially vulnerable state.  Delaying life insurance is also a mistake because you will have access to the cheapest rates when you are young and healthy.  So, if you have young children or are about to become a parent, then don’t wait to secure your life insurance policy.

  • Relying on Life Insurance Through Work

Today, many employers include life insurance coverage as part of their employee benefits package.  However, if you have a family relying on your income, then the life insurance benefits your work offers probably isn’t enough.  This is because most employer-offer life insurance policies only offer coverage for one to two times your annual salary. As breadwinners should carry life insurance worth at least seven-times their salary, this employer-offered life insurance simply isn’t enough.  This is why you should secure a personal life insurance policy and treat your work policy as an additional benefit.

These are some of the major life insurance mistakes that you should avoid.  Do you need help securing the right life insurance policy to protect your loved ones?  If so, then contact the experts at Steve Wilk Insurance.  We are ready to get you the coverage that you need today.  Check out our new office today at 310 S Main Street, Suite C, Lombard, IL 60148.