The Dos and Don’ts when Buying Life Insurance


Life insurance shopping is a complicated and painstaking process. These reasons alone should be more than enough to make shoppers more vigilant in choosing between providers. Here are some basic rules of thumb that you should follow as you go:

  • If possible, make sure to separate your investments with that of your life insurance policy
  • A large percentage of life insurance experts are stressing the importance of sticking to term life insurance policy these days. Times are tough and the last thing that you want are huge losses from failed investments and significant increase on your already-expensive premium payments.
  • Although whole life insurance policies promise guaranteed death benefits and increasing cash value that you can borrow against tax free, you are also faced with the fact that this type of life insurance product comes along with high commission rates and unnecessary fees. If you find yourself strapped for cash, the cancellation penalties are downright costly, and will ultimately negate the cash value that you have successfully built through the years.
  • Whole life policies are not what they used to be. You can save cash by other means and invest your money on more profitable endeavours instead.
  • Always have a backup plan for your back up plan
  • Remember that life insurance such as that of term life policy can only supplement the loss of income upon your demise, but will not bring in benefits to your or your family while you are still paying premiums. It can never replace a more solid retirement plan.
  • Make sure to have enough personal savings aside from the payments you make for life insurance and other important necessities.  If your term life insurance expires, but you still have financial obligations to pay off, make sure to consider seeking the help of a life insurance expert in choosing the right life insurance product for your situation.
  • Never fall for insurers or brokers who claim life insurance is a profitable investment or a viable source of funding after retirement.  In addition, never confuse an annuity to that of life insurance as the former provides consistent income for retirees over a predetermined number of years.
  • If you have the knowledge and background on investing money on other ventures or opportunities, make sure to consider these options first before thinking on allocating them to your life insurance premiums.
  • Always make sure that you have enough coverage
  • This is where the need to perform extensive research comes in. If you buy insure by impulse, you are most likely to end underinsured.  Bear in mind that the life insurance industry is now competitive, thus making life insurance products more affordable than ever before.
  • The cheapest isn’t the best
  • A small increase in the interest rate is more than worthwhile if you are to choose a life insurance provider with exceptional ratings.  Your life is important, thus make sure to purchase only from reputable companies than entrusting it to an insurer with a shady reputation or one that just started its operations.

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