The Top Three Life Insurance Mistakes

You probably know that enrolling in a good life insurance policy is one of the best ways to protect your family. But that protection can be somewhat less valuable if you make one of these common mistakes with your life insurance plan. When you're shopping for a policy, try not to become overwhelmed with the wide variety of options available to you. Keep in mind that you can help to prevent problems by watching out for these pitfalls.

Forgetting the needs analysis. Some people skip this step, either because they aren't aware of the importance of a needs analysis, or they think they already know what type of policy they need. But performing a needs analysis is the best way to determine how much life insurance you need, and it helps you narrow down the type of policy that is right for your situation. A life insurance policy is a major financial decision, so take the time to get your most important questions answered.

Failing to compare policies with several providers. Your life insurance rates are determined by your provider's estimation of your risk. But each insurance provider has different ways of calculating risk, so policies worth the same amount can vary widely in price from one company to another. You don't want to select an expensive policy you can't really afford and drop the coverage later, so compare premiums between at least three different companies before selecting a policy.

Neglecting to reevaluate your needs. Your family's needs may change over the years, so why would you stick with the same old life insurance policy forever? Every two to three years, or after major life changes, you should perform another needs analysis to make sure your current policy still works for you. If you need more coverage or a different type of policy, talk to your insurance professional about upgrading to a new one so that you can continue to offer your family the best protection.

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