Don’t make these 5 mistakes when buying life insurance
If you’re thinking ahead to the future, then you may be considering buying a life insurance policy to protect your loved ones.
Life Insurance needn’t be complicated as you may think, however there are definitely some pitfalls you want to avoid:
Don’t get hung up on the cost of life insurance
Many people put off buying life insurance because they think its too expensive. Life Insurance will vary in price depending on the level of cover, however it can start from as little as just over £5 per month.*
Speak to a life insurance specialist who can search for the right deal for you at the right price. And don’t forget to look at the whole picture – spending a few pounds each month could mean a world of difference to those left behind.
Don’t assume that your life insurance policy will never pay out
As long as you buy a life insurance policy from a reputable provider, we can assure you that life insurance isn’t a scam. According to data from Aviva, 99% of all life insurance policies claims pay out.
If you’ve provided truthful, accurate information, there shouldn’t be any reason why your insurer declines the claim.
Don’t underestimate your needs
It’s one of the most common questions that people ask when buying life insurance. How much should I insure myself for?
Many people underestimate their needs or pick a smaller number than they’d like to try and cut down on costs. It’s really important to try and do your sums first, otherwise you may run the risk of selling your beneficiaries short.
There will be different factors to consider. If you’ve already built up a significant savings pot, you may not need so much cover. On the other hand, if you have a spouse or a family, you may want to ensure that there is enough in the pot to provide for them in the long-term. You’ll want to look at the amount of mortgage debt you have, other debts and expenses that need to be paid. Are their education costs coming up in the future or would your spouse need to give up work to look after the children?
Doing your sums now can help to avoid additional heartache at an already upsetting time.
Don’t wait too long before buying life insurance
The sooner you buy life insurance, the cheaper it is likely to be. If you are young, fit and in good health then you shouldn’t have a problem getting an affordable policy. Many people wait until they are homeowners or married with a family before buying life insurance. However you’ll run the risk of higher premiums or even being denied coverage if you develop a serious illness as you get older.
It’s definitely never too early to think about buying life insurance to protect your finances in the future.
Don’t forget to review your policy
So you already have a life insurance in place? But is it still meeting your needs? The great thing about life insurance is that it can be reviewed and amended if your circumstances changed? Perhaps you took out a policy to cover your mortgage debt when you bought a house in your twenties? But now you’re in your thirties with a spouse and a couple of kids? Does your policy ensure that they will be protected in the event of your death?
It’s good practice to review your life insurance policy in the event of significant life changes whether that’s marriage, children, divorce or simply moving to a larger property.