Knowing the most common life insurance mistakes to avoid makes it easier for you to get the perfect coverage you need. While the fine printed parts may be difficult to read, it is important that you pay special attention to it so you truly understand what the policy offers and what it doesn’t.
After all, it is easy to make a mistake when opting for a life insurance plan is concerned. Here are the most common life insurance mistakes to avoid while going for a life insurance plan in Toronto and Mississauga, Canada.
Getting the wrong insurance or ignoring the rest
When it comes to insurance, there is a common tendency to focus only on life insurance. But then, death is not your biggest risk. What about critical illness, disability, or long term care? Think of the bigger picture in terms of your requirements and then go for it.
Going for the 10-years Term Insurance plan
If you opt for the 10-years Term plan, your premium will jump up dramatically after the completion of your term period.
If you are in fine health at that point in time, it makes more sense to opt for a new insurance than going for a renewal because it is often cheaper.
The safe option would be to opt for a longer term. In fact, your choices are not limited to 10, 15, or 20 years. There are other options available that can last a lifetime – talk to an experienced financial advisor to know more about your options based on your current age, requirements, and budget.
Not having enough insurance
If you are young and healthy, life insurance rates are often the lowest – even more than what you can imagine. For a small additional cost, you can get more coverage at this point in time that can last you decades.
Underinsuring yourself would result in more expensive plans at a later stage in life when the premium rates creep up along with your age.
Going for only term insurance and ignoring permanent life insurance coming with a cash value
Permanent life insurance often comes with a cash value that combines tax-sheltered investments with insurance.
You may think that it is better to invest in a term life insurance plan and investing the difference yourself – but would you really do it? We think the discipline of forced savings in insurance would suit your better.
Not reviewing your life insurance coverage periodically
Your life insurance coverage is more than paying premiums. It is dependent entirely on your situation that changes continually.
Maybe you have reached a certain point in life where you have added to your family and want to add life insurance for babies.
A periodic life insurance review, even once a year, makes it easier for you to see if adjustments are needed. An experienced financial advisors can again help you with that.
Cancelling your insurance
Cancelling is easy. Getting it back on is not.
You may very well regret the decision at a later time – so, explore for more options before coming to a decision. Again, it is better to consult your financial advisor if you are short on money and plan to cancel your insurance. Maybe, your advisor can come up with a feasibly better solution.
Procrastination
Remember, you can buy life insurance ONLY before you need it. Since nobody can predict the future, delaying life insurance comes with massive risks.
The younger you are, the better it is. Even if you cannot afford as much as you would like, you can get something that you can afford and top it up at a later time.
So that’s basically it. We hope you keep the above tips in mind while going for the best and affordable life insurance plan in Toronto and Mississauga, Canada. With that, we will bring this post to a close. Hope you had a great read.