Life Insurance Six Common Mistakes To Avoid
6. Life Insurance Is A One-time Exercise
Happiness Is Family!
I am reminded of an old motorcycle advertisement on television, which had the punch line, “Fill it, shut it, forget it”.
Some insurance buyers have the same philosophy about life insurance. Once they buy adequate cover in a good life insurance plan from a reputed company, they assume that their life insurance needs are taken care of forever. This is a mistake.
The financial situation of insurance buyers changes with time. Compare your current income with your income ten years back. Hasn’t your income grown several times?
Your lifestyle would also have improved significantly. If you bought a life insurance plan ten years ago based on your income back then, the sum assured will not be enough to meet your family’s current lifestyle and needs, in the unfortunate event of your untimely death.
Therefore you should buy an additional term plan to cover that risk. Life Insurance needs have to be re-evaluated at a regular frequency and any additional sum assured if required, should be bought.
Investors should avoid these common mistakes when buying insurance policies. Life insurance is one of the most important components of any individual’s financial plan.
Therefore, thoughtful consideration must be devoted to life insurance. Insurance buyers should exercise prudence against questionable selling practised in the life insurance industry.
It is always beneficial to engage a financial planner who looks at your entire portfolio of investments and insurance on a holistic basis so that you can take the best decision with regards to both life insurance and investments.