Even if you are paying the premium on your life insurance policy, the chances are that your money will be wasted if you make the following blunders. Learn about the top mistakes to avoid when purchasing a life insurance coverage.
1. Getting started late:
If you believe that because you are young, strong, and healthy, you do not require life insurance at this age, you are mistaken. It is crucial that you are prepared to confront all the unforeseen situations that can even lead to your death. Furthermore, if you have a family to support, getting started early is essential. When you acquire life insurance at early age, you should realize that it will cost you less premium since you are less likely to be affected by lifestyle linked illnesses. Also, under Section 80C of the Income Tax Act of 1961, you can save up to 1.5 lakh in taxes by investing in life insurance contracts.
2. Buying low-cost life insurance without alerting your family:
Remember that you’re purchasing a lie insurance policy for your entire family, not just yourself. They are the ones who would be eligible to receive the cash assured in case of your untimely demise. They are also the ones who will file the claim on your behalf. So how would they know about the policy and file a claim if they aren’t informed? Not informing the family is a poor decision, as the insurance company will be the sole recipient of the claim settlement. As a result, it’s critical that you inform your family about your life insurance purchase.
3. Investing in too many policies:
If you think that by investing in too many life insurance policies, you are doing a great thing, then you should realize that you really aren’t. By overinsuring yourself, you are simply incurring excessive costs and sacrificing the opportunity to invest in other things. Keeping track of too many premium payments is also time consuming and might result in policy lapse in some situations.
4. Nominating a minor as a candidate:
If you intend to keep your minor child as the nominee, you are making a mistake. The family will not suffer financially as a result of Minor’s absence. The claim would not be available to your family until the youngster turns 18. Your family would be trapped with no one to guide them.
5. Purchasing the cheapest policy:
You are making a mistake if you purchase a life insurance policy with a low premium rate. When investing, it’s critical to consider the insurer’s coverage options. Check to see if the coverage amount is sufficient to support your family’s living expenditures. When choosing coverage, keep inflation in mind as well. Examine whether the insurer is willing to provide you with any additional riders to expand the coverage of your life insurance policy. Always compare life insurance policies online before selecting on a cheaper coverage so that you can insure your life with the finest plan and receive discounts.
6. Ignorantly Following the advice of the agent:
When purchasing a life insurance policy, consider your needs, risk profile, and income. Simply don’t believe whatever the agent says because you can wind up buying the wrong thing. Remember that every policy sold earns the agent a commission. As a result, always conduct your own research, read the policy’s terms and conditions before investing.
To safeguard your family from financial hardship in the future, make every penny count and avoid the above blunders.