Life Insurance: 4 Key Mistakes And How To Avoid Them
By Evan Davis
Life insurance, whether you are talking about whole life, term life, or one of the many policy variations available, can be a complicated and misunderstood subject. Perhaps for this reason it is not unusual that we make wrong decisions when purchasing a life policy. With that in mind, we would like to bring up what some experts consider to be the four most common mistakes made when purchasing life insurance.

First, treating your life policy as a savings account. is often purchased for two reasons, tax savings and as an investment instrument. Many experts believe that life is best purchased to do what it is intended to do, which is provide protection in the event of loss of life. For this reason we suggest, as do many experts, purchasing a term policy for life insuance, and for savings purchasing a separate mutual fund account. Granted, this view is somewhat of a purist viewpoint and will not be for everybody. Still, term policies are relatively inexpensive, free of complexities, and payout quickly.

Second, allowing your agent to make all of the decisions. Do your homework and understand what you are buying. We urge you not to trust your agent too completely–regardless of how honest or well intentioned you believe him or her to be. Your agent may be a model of intelligence and integrity, but the ultimate responsibility for any decision made rests with you; don’t give

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someone else all the power.

Third, treating the purchase of life as a one-time–purchase-and-forget-about-it–activity. Your needs will change over time. As your life circumstances change, so will your needs. For example, the sort of policy you buy as a single individual will not provide adequate coverage should you decide to marry and start a family.

Fourth, buying the wrong kind of insurance. Yes, this is an all too common mistake. For example, many people buy universal or variable life policies without properly understanding the kind of they’ve bought and that these are complicated investment instruments. This sort of purchase might be completely wrong for a single person whose income would not allow premium payment in the event of unfavorable market fluctuations.

When buying life insurance, be sure to take the time to do your research. It isn’t necessary to spend sleepless nights in the library. However, it is important that you thoroughly understand your needs and which sort of life will offer the best protection with respect to the demands of your life. There is a great deal of concern about finding the cheapest, or lowest cost life insurance. But one action you can take to insure you get the lowest premium price for your “life” is to put in the time to learn how to make an informed decision about the life that will serve you best.
Evan Davis works in Medicare customer service and is the webmaster and owner of Value Life Insurance. Find out about cheap term life quotes online and low cost term life premiums at www.a2b-life-insurance.info

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