If you’re buying life insurance, you’re already on the path to doing things right. However, you may not know that buying term life insurance brings with it the opportunity for errors, and people make these mistakes all of the time. But you can avoid being one of them when you purchase after having read the four secret pitfalls of term insurance. If you don’t want to suffer buyer’s remorse, keep reading.
- Waiting until it’s too late.
Have you held off on buying life insurance? One of the reasons you may have done so is because you’re worried about paying the premium. The truth is, it isn’t going to get cheaper with time.
As you age, the cost of your premium may increase. It’s important to buy term insurance while your family is still young and you are reasonably healthy. Those at an advanced age, or with certain health conditions, always wish they had gone through with the insurance purchase earlier on.
- Undervaluing yourself.
How long will it take your family to begin to move on after you’re gone? Your term plan should be paying out much more than a year’s salary in the event of your death. Sit down today and work out a budget which assumes you’ve passed.
Does a payout equivalent to a year of your income really cut it? Smart buyers look for amounts that would add up to ten years of pay – sometimes more. This way, you know your family will have a decreased chance of having to move out of their home, skip college, or take on extra jobs.
- Buying for the shortest term available.
Life insurance is designed to compensate for our absence. While money can never replace a valued family member, it can definitely make growing up without a parent a little bit easier. This is why we have to think about the current age and life trajectory of ourselves and the people who depend on us.
Let’s say that you buy a 10-year term. If you survive the term, you might find that the next term you buy is more costly because you’ve gotten older, and maybe picked up a health condition or two.
If you don’t survive the term, there’s a chance the money could run out before any young children grow up and become self-sufficient.
- Keeping your term life insurance a secret.
Death is a topic many partners and spouses are uncomfortable discussing. This can lead those with policies to avoid letting their spouses know about it. Or, they think the policy can be a surprise when they die, like a gift to ease the suffering a little bit.
Too often, this doesn’t work. To ensure your family gets the money you intended them to have, let someone know about the policy, and where to access the information associated with it.
Want your term life insurance to work for you and your family? Then it’s simple – buy early, get a good rate on a longer term, opt for a plan that covers you ten times over, and let someone you trust in on the details. The peace of mind and security you’ll get is worth far more than the cost of your premium.
About AEGON Life
A joint venture between AEGON – world’s leading financial services and Bennett, Coleman & Company – India’s leading media house, AEGON Life Insurance launched its pan-India operations in July 2008. Armed with a vision to be the most recommended new age life insurance Company, AEGON Life adopts the power of global expertise by leveraging digital platforms to bring transparent solutions, and to prioritize customer needs. Our financial planning and investment solutions include term life insurance plans, pension plans, unit-linked insurance plans (ULIPs), health insurance plans, child education plans, and more.