Mistakes to avoid when getting life insurance

If you don’t know the facts, however, the wrong policy could mean financial disaster for those you leave behind. There are a couple of things to watch out for and avoid when shopping for a life insurance policy. 
Here are the most common mistakes to avoid when getting life insurance.  
Choosing the wrong life insurance policy 
Life insurance policies come in many different forms and it’s important to make sure you’re getting the right option, particularly if you have dependents or loved ones who would suffer financial hardship in the event of your death.  
While there are several different types, including universal life insurance, critical illness insurance, disability insurance, key person insurance, and funeral insurance, the two most important types are term life insurance and whole life insurance.  
Term life insurance, while cheaper, only covers you for a specific period of time, like 10, 20, or 30 years. So if you die during your agreed term, then your beneficiaries receive a death benefit but if you outlive your set term, you miss out. And then there’s whole life insurance, which covers you for your entire life (as long as your premiums are paid), and comes with a few other benefits.
The key to making this decision is to assess what you really want from the policy and then to weigh those goals against the costs of each. 
Intimidated by the costs 
The fact is that life is extremely expensive, so adding yet another cost can be daunting. The thing is, life insurance isn’t something you should skimp on because it’s intended to help your loved ones when you can’t. If you focus on the cost of life insurance instead of what it’s meant to do, then you’re likely to put it off. Rather think about whether the money you save now is really worth the affect it could have on your family when you’re gone.  
Not enough coverage 
You may have thought that you just needed to choose the right type of life insurance and that would be that. But actually, what’s of equal importance is deciding how much of a death benefit you need. A major mistake is when people pull a number out of thin air. More often than not, they choose an amount that isn’t enough for their beneficiaries.  
Work with your life insurance broker or financial advisor to accurately assess what you’ll need to provide for your dependents financially. 
Not shopping around 
Like any other type of insurance, you’ll want to shop around. Don’t just go with the first quote, rather compare the costs and benefits from a few different companies. Make sure you give the same information to every provider and that you look at multiple plans to check for major differences in the coverage. 
Delaying your choice 
Life insurance premiums increase as you get older. That’s the way it works, so even if you’re in the pink of health, you’ll still pay more for every year you don’t get it. Worryingly, you also run the risk of developing a serious disease which could mean that you’d either pay much higher premiums or your cover could be denied altogether. 
Forgetting about it  
Once you get life insurance, don’t make the mistake of sticking it in a drawer or the Cloud and forgetting all about it. Make sure that you review your policy regularly (or with your financial advisor) to check that it still fits your needs. It’s much better to be on top of this and make adjustments than to continue paying for insufficient cover. 
Feeling informed? 
It’s understandable that you wouldn’t want to dwell on your own mortality, but the reality is that a vital part of any financial and future planning involves life insurance.