When searching for term life insurance quotes, you need to make sure that you are getting the best policy that suits your future plans
Beginning the search for a term life insurance policy is an important life decision. Securing life insurance is a great idea for anyone who has dependents or has currently outstanding debts. However, life insurance is not the most straightforward product—which means you have to do a bit of research before settling on a term life insurance quote. That’s why we’re taking a look at some of the most common mistakes that people make when it comes to purchasing term life insurance. We’re going to be examining the most common mistakes while presenting you with strategies for every step of the process from applying for term life insurance online to making your final decision. If you’re ready to explore the world of term life insurance, then you’re in the right place. Let’s take a look at the mistakes you need to avoid in order to get the best coverage that suits you and covers your loved ones.
Mistake #1: Not Being Truthful on Your Application
When you are applying for a term life insurance quote, you need to disclose all of the required information
Lying on your life insurance application can have legal consequences.
If you are applying for a term life insurance quote for the first time, you’ll quickly notice that you have to answer a lot of questions about your health and wellness. Insurance companies evaluate potential clients based on a number of health and lifestyle factors including whether or not your smoke, your profession, your health history, chronic illnesses, and any dangerous hobbies. It is commonly known that the fewer risks you present to the insurance company, the better rate you will receive. However, if you are not being truthful on your application in an effort to get a lower monthly premium, you are committing insurance fraud. Though this may seem like an uncommon occurrence, it is actually something that happens all the time—which is why we’ve listed it here as our first mistake to avoid.
In order to avoid the consequences of committing insurance fraud, we recommend that you are truthful about all aspects of your life asked by the insurance company. There are—however—ways that you can get a deal on your monthly premium without lying on your application. In order to get the lowest possible term life insurance quote, we recommend comparing different quotes and opting for the most affordable option.
Mistake #2: Waiting Too Long to Get a Term Life Insurance Quote
The best time to get a term life insurance quote is while you are young
Save money on your monthly premiums by purchasing a policy as soon as possible.
Another very common mistake that people make regarding life insurance is putting off purchasing a policy. It makes sense—a life insurance policy is yet another monthly expense. Plus, who needs life insurance as a young person? Unfortunately, the longer that you put off securing a life insurance policy, the more money you will end up paying for your monthly premium. Additionally, if you have any outstanding college debts or plans to get married in the next few years, it is definitely beneficial for a young person to have life insurance. In the event of your untimely death, your debts will be transferred to your loved ones—which adds financial stress to your family after your passing. No one wants to create additional financial burden on top of consistently rising funeral costs. Because of these factors, we highly recommend securing a term life insurance quote while you’re young instead of waiting until you’re older. For example, a monthly term life insurance policy for someone in their 20s can be as low as $15-$20 per month whereas the same policy for someone in their mid thirties can be up to $50-$60 per month. So, if you are worried about the extra monthly expense, keep in mind that as you age your premium will continuously increase.
Mistake #3: Not Buying Enough Coverage
When shopping for term life insurance quotes, make sure you are purchasing enough coverage in the event of the unthinkable
Ensure you are covered for the important things in life.
For someone who hasn’t previously explored the world of life insurance, it can be difficult to calculate how much coverage is enough. Depending on your life circumstances—including debts—you may need more or less coverage. However, as a general rule you should plan to cover at least 10x your yearly income. For most people multiplying their income by 10 is merely a starting point. Take young parents for example, they will need to first calculate their yearly income by 10 and then begin to add additional costs including child care and higher education costs. These additional considerations need to be added on top of your income calculation. If you are totally stumped as to how much life insurance you need to cover your loved ones, then you can always consult a financial advisor to help you avoid purchasing too little coverage.
Mistake #4: Not Purchasing a Long Enough Term
Make sure your term lasts long enough to cover major life events like paying off your mortgage and raising children
Planning your future is necessary to get the right amount of life insurance.
Thinking 10, 20, or 30 years in the future can seem daunting. But, when it comes to purchasing life insurance, planning for the far in the future is essential. One of the biggest mistakes people make when purchasing a term life insurance policy is purchasing too short of a term. A 10-year policy for someone in their 20s and 30s is much too short of a policy. This is especially true if you have a mortgage that will last longer than 10 years or are raising children. Should your term life insurance policy run out before your mortgage is paid off or before the kids head out to college, your spouse and family will have to take care of everything outstanding. To make sure that you are getting the best coverage for your family, you should make sure that your term covers these major life events like raising children and paying off any outstanding debts.
It is also important to mention that if you purchase too short of a term, you will most likely end up taking out another life insurance policy down the line. As you age, the cost of the monthly premium rises. That means when you go to purchase a second term life insurance plan after the first has expired, you will end up paying more money for the same amount of coverage.
Mistake #5 Getting Bogged Down With Term Life Insurance Riders
While some term life insurance riders are beneficial, beware of adding too many and driving up the cost of your premium
Many people aren’t sure if they need life insurance riders or not.
While this is not necessarily true across the board, there are some insurance companies that will encourage you to expand your coverage by adding several riders to your plan. These riders apply specifically to a number of different situations including death by car accident, critical illness, or accidental death. Though it is definitely tempting to add riders to your plan, in most cases it is not needed. You don’t necessarily need to have riders that relate to specified causes of death because your term life insurance policy covers those anyway. It may be beneficial for some to have a rider that specifically covers funeral costs after your passing, but these are not required for everyone with a term life insurance plan. So, if you want to add a rider to your life insurance policy, make sure that you carefully consider whether or not it is absolutely needed in addition to your main insurance policy.
Purchasing life insurance can be a complicated process—but it doesn’t have to be! There are many sites out there that can get you a free term life insurance quote and help you get started. Your personal peace of mind could be just a few clicks away!