Tips for Making a Wise Insurance Purchase
1. Buy adequate coverage.
Strive for enough to really protect your family. It’s tempting to procrastinate or squuze by with less protection. No one ever thinks tragedy will strike. But the point of insurance is to protect your family in the event of a tragedy! Thousands of families are now truggling because they didn’t take protection seriously.
2. Buy only one policy per family.
Life insurance policies generally have a fee that pays for processing and administration of each policy. This can be as high as $50-$100. Separate policies mean separate fees. If you have separate policies on yourself, your spouse and on your children, you could be losing money! A primary policy and a “rider” for your spouse could be more economical.
3. Avoid life insurance on children.
Life insurance on children isn’t necessary in most cases. The coverage on the adult will provide for the children. If you really feel its necessary, buy only enough for burial expenses. And remember to purchase the coverage as a “child rider”, not as a separate policy.
4. Avoid expensive ‘gimmicks.”
Remember that extra options on your policy mean extra cost that can prevent you from buying the maximum protection. One possible exception might be a Waiver of premium benefit, which provides for payment of your premium if you become disabled for a period of time.
5. Avoid insurance policies disguised as something else.
Some companies offer various types of specific coverage insurance, such as mortgage insurance. These are nothing but life insurance policies! (Take a moment and read this important article about The Dark Side of Mortgage Isnurance.) If you want to assure that your home would be paid for in the event of your death, simply add more coverage to your primary insurance policy. The same is true of short-term life policies like credit life, which is nothing more than an expensive form of decreasing term.
Although the salesperson may sometimes leave the impression that this is required, it’s usually not!
Next Step: Buy the Right Kind of Insurance!
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