Common mistakes when buying life insurance

Owning life insurance can give you comfort in knowing your loved ones are taken care of after you’re gone. But life insurance plans aren’t one-size-fits-all. Selecting the right plan requires dedicated time and research.

You can help ensure the comfort of your loved ones when you’re no longer here with the following tips to help you avoid some common mistakes that people make when purchasing life insurance.

What should you consider before you buy life insurance?

One of the first things you’ll want to consider when you buy life insurance is what amount of coverage you’ll need. There are several options to consider, such as term life, whole life, universal life and variable universal life, which all have unique advantages that can help meet specific lifestyle needs. Term life, for example, is typically the most affordable insurance option and offers coverage for a specific amount of time. This kind of life insurance policy is cheapest when you are young. Learn more about what kind of coverage is right for you.

1. Not researching to compare life insurance rates

The various types of life insurance policies have differing costs. You’ll want to compare rates while taking into consideration what kind of coverage you need. Make sure you’re getting a policy that is in your budget, yet capable of achieving your goals to protect youroved ones. For example, your goals might include providing the amount to pay off a mortgage, saving for college or covering debts and final expenses.

2. Relying solely on employer-provided life insurance

While employer-provided life insurance is a convenient benefit to have, these policies do not stay with you when you switch employers. This kind of coverage also may not be sufficient to meet your needs. By purchasing an individual policy, you can ensure that you have more substantial financial protection.¹

3. Assuming the cost of buying life insurance is too high

44% of millennials overestimate the cost of life insurance at five times the actual amount.² But getting a wallet-friendly policy can be easier than you think. Some types of life insurance policies, such as term and whole life insurance, can be more affordable than others. And some policies are also more affordable while you are young. Learn more about how you can find a policy that fits your needs and your budget.

4. Not buying enough coverage

Prioritizing finding a life insurance with sufficient coverage means you’re prioritizing your loved ones and their futures. If you have family that relies on your income or needs funds to cover essentials such as a car payment or mortgage, those are things you will want to take into consideration when choosing a life insurance policy that offers the right amount of coverage. The right policy should help fill the gap between your assets and your obligations when you’re no longer here.

5. Waiting to buy life insurance

When you wait to purchase life insurance, you run the risk of being unable to buy the best policy to protect your loved ones. That’s because insurers take age and health into consideration when choosing whether to issue a policy. Life insurance premiums also tend to increase with age, so the sooner you obtain a policy, the more coverage you will get at a price that may be easier to afford. But perhaps most importantly, having life insurance now will offer your loved ones some financial stability in case of unexpected tragedy. Take the next steps in protecting the people you care about today by learning how to buy life insurance online.