Few things are more important than having the right insurance coverage. About ten years ago, I was involved in a near-fatal crash where I experienced traumatic physical and emotional injuries. It was really challenging for me to endure the hospital stay and subsequent physical rehabilitation, but with the help of my medical team and my insurance company, I was able to overcome the challenge and completely recover. This blog is all about the importance of choosing the right insurance plan so that you can get on with your life and enjoy those precious years with your family and your friends.
You may believe that purchasing life insurance will be as easy as getting insurance for your home or car. Unfortunately, there are mistakes that can be made when having life insurance. Avoid doing these 3 things.
Borrowing The Policy's Cash Value
Term insurance policies will have their own cash value that will build up over time. It's a nice safety net in case you have an emergency and do not have the cash to pay for it. Unfortunately, some people may view this cash value as a savings account they can dip into.
It's not a very good idea to do this if you only have one life insurance plan. The purpose of the policy is for passing on money to family members after you pass away. If you do borrow this money, then your life insurance payout amount will be significantly reduced. You may be better off taking a loan depending on how much you will lose out on the potential payout of the policy.
Purchasing Life Insurance In Multiple Pieces
It's common to be offered life insurance when you are working with other financial companies. For example, a mortgage provider may offer a life insurance policy to help pay off your mortgage. A credit card provider could offer protection in the form of life insurance to pay any credit card debt you have when you die. Even a car insurance provider can offer protection to pay a car loan.
It is a better idea to get a single life insurance plan that will give enough financial security to pay all these kinds of debts. Working with specific financial providers will only pay off those specific debts, while a single life insurance policy can pay off the debts and have additional cash that will go to your family.
Only Insuring One Income Provider
Having a household with a spouse means that you are both contributing to bills, so both of the income providers should be covered with a life insurance policy. Even if you have a policy on the primary income provider, you may not realize the financial repercussions of losing a spouse who stays at home. A life insurance policy can help pay for childcare that would now be needed or unpaid time off of work that is necessary to grieve.
To avoid making any of these mistakes, be sure to work with an insurance agent in your area that specializes in life insurance. They have the experience with these types of policies, and can use their expertise to recommend coverage.
For more information, contact Daniel L. Rust Insurance or a similar company.
Share5 July 2016
