May « 2013 « CheaperHealthInsurances.com
- - Navigate to... - - HomeInsuranceHealth InsuranceHealth Issues
Are You Making These Common Life Insurance Mistakes? Buying life insurance is easy right? All you do is hop online, get a few quotes, and buy the cheapest policy you can find. Hold your horses. If you approach life insurance like you approach any other commodity, you’re making a huge mistake. Life insurance is often sold as just another commodity, but it sits at the base of every savings plan since it represents a cash advance on your future earnings.
How does it represent a cash advance on future earnings? Think about it for a moment. You’re paying a small sum of money to an insurance company (i.e. the premium). You’re receiving a large sum of money in the form of a death benefit. It’s conditional, of course. You can’t use that death benefit in most circumstances – you can only leave it behind.
Of course, certain contract provisions may allow you to use it – and here is where the issue of life insurance becomes somewhat more complicated.
It’s easy to buy on price. You do it all the time. Most businesses gear their advertising towards your thrifty sensibilities. However, with most products, you’re buying a consumable good or service. It’s a product or service that’s widely available in the marketplace, and there’s relatively little difference between product offerings. It’s no wonder businesses compete on price.
With life insurance, you’re buying a future savings. It’s the life insurance company’s cash reserve that will be used to pay off your debts if you die. A “race to the bottom” is certainly one way to purchase life insurance, but this product offers you so much more than just a death benefit.
Some insurance policies have a duel role: they provide death benefits along with living benefits. A basic principle of an insurance plan is that you must build a savings to meet or exceed your financial obligations. Insurance allows you to accomplish this. Some forms of insurance allow you tight control over that savings.
You Don’t Have a Savings Plan
If your plan is to just buy term life and forget about building a savings, you’re making a huge mistake. Building a savings is hard work, but ultimately necessary. Why? Because you won’t be insurable forever. At some point, you will need a savings to pay for your financial obligations.
When you’re young, you just don’t have the earning capacity that you have when you’re older – hence the need for insurance. As you grow older, you should be replacing your insurance with your own personal savings.
Policies like whole life and universal life integrate the savings you need right into the death benefit function of the insurance. Of course, you could build a savings outside of the policy too. The important point is that buying insurance isn’t just about buying a policy. It’s about laying the foundation for your current and future savings plan.
You Buy Extra Riders You Don’t Need
Many agents suggest a plethora of riders. A rider is an addition – a modification – to your policy. Usually, the rider adds some novel function – like paying premiums when you’re disabled and can’t do it yourself – but all riders cost additional money. Because of this, you need to think carefully about which riders make sense for you, if any.
For example, most agents recommend the waiver of premium rider. This rider waives the premium requirement when you’re disabled. Is this necessary? It depends. If you’re buying a straight whole life policy, or a 30-year term policy, it might be. If you’re buying a 10-pay whole life policy, it might not be.
Since many insurance companies offer an automatic policy loan to cover the premium if you miss a payment, and most disabilities are short-term in nature, getting a waiver of premium rider added to your policy might not make sense. This is especially true if you have a permanent policy like whole life or universal life, and you anticipate building up substantial cash value.
Policy loans can always be replaced, and the interest may be less than what you would pay for the waiver of premium rider. This kind of analysis should be done with every rider – in many cases, you’ll find that the base policy is sufficient and the rider adds cost without substantial benefit.
Read MoreHow important it is to get Life Insurance in Missouri? If you are residing in Missouri then get in touch with your agent today to cover your life insurance policy. Life insurance in Missouri can be obtained with benefit on tax deduction but there are certain terms and conditions which your agent can explain you.
It is known fact that, life insurance policy is very important in order to protect your family during tongue-tied situations like the one which relates with serious health issues. Keeping your family financially secured is never bad idea. Life insurance in Missouri can be obtained on term policy basis, whole life insurance policy or endowment policy basis.
Family benefit to life insurance policy is such that after occurrence of any uncertain event of your life, they can make use of money in other tasks like educating children, paying debts, repaying loans, etc. Suppose you have already reached to the retirement age where children are settled in their life and there is no such crisis situation where your family would need money then in such case you can get your policy under term coverage benefit. Why not you only make use of saved money in your retirement and lead a lavish life?
Term life insurance policy is such where you policy is limited to certain time period. If required you can extend the period of term policy considering the fact that you would be able to make premium payments, whereas in whole life insurance policy beneficiaries can gain benefit of policy after your death. If you are residing in Missouri then it is advisable to get in touch with life insurance agent who can guide you appropriately. In endowment policy, insurance coverage is for period of time just like term insurance policy but here in case of your survival you get the assured sum amount along with profit. Well, your family won’t get any kind of bonus or profit if you do not survive in such kind of endowment policy.
Term life insurance policy and endowment policy are for the people who do not have habit of savings. In Missouri people look for obtaining such policies so that they can save sum of amount which can be used after the policy gets expired. If you are well settled and do not have much botheration related to money then you can opt for whole life insurance policy. Being a working person you might not get time to look after your policy premium dates and so you require life insurance agent who can look after your policy. Agents for life insurance in Missouri can aptly guide you related to payment issues and can also impose suggestions in case if there is any kind of change in law and conditions.
Latest PostsPrivate Health Insurance Exchanges Enjoy an Edge Over State HIX12 months ago Private health insurance exchanges though principally similar to publicAffordable Health Insurance A Savior at the Time of Financial Crisis12 months ago If you are looking for affordable health insurance then you should firstWhy Invest in a Health Insurance Policy?12 months ago Instead of labelling the purchase of a health insurance policy as an unnecessaryPersonal Health Insurance – The Bridge Between Health And Wealth12 months ago Considering the sky rocketing costs of medical treatment in India, healthHealth Insurance Exchanges – Opportunities For Payers12 months ago 32 million consumers. That is the projected figure for US uninsured consumers