We all want to be able to plan ahead and provide for our families after we pass on. Many people choose to do so through life insurance coverage. However, with laws and circumstances changing all the time, sifting through all the different types of life insurance policies can be a complex and overwhelming process. In 2014, there were 35.7 million people without any type of healthcare insurance, and with premiums on the rise, many people can’t afford to have both health insurance and life insurance.
However, many people have found that short- term insurance can provide the peace of mind they need without the undue financial burden. A short- term life insurance policy can help when you have an employment gap or need a supplement to your existing insurance plan.
1. Miscalculating your needs
Once you’ve chosen your policy type, you still have decisions to make regarding your coverage. You’ll need to figure out how much your loved ones will require to live once you’re gone. Picking a number at random will likely result in a shortage in the long run. Think about your age, health, and life expectancy, as well as your current income, debts, and assets. For instance, a senior couple with few living relatives, significant savings, and no real debt will not need nearly as much coverage as a family with young kids to support and only one spouse in the workforce. If you don’t work yourself, don’t assume that this means you don’t need coverage. Although you’ll have no lost income to replace, your policy can still cover childcare costs, housekeeping assistance, facility placement, and other expenses.
2. Basing your decision on price alone
The cost of life insurance can be a real shock for some people. Short- term insurance can certainly lessen the financial blow, which is why many people opt for term life insurance. However, don’t reduce your coverage just so you can get a lower premium. Like health insurance, you’ll be paying less out of pocket, but you may be skimping on something that can really benefit your family. If your current plan is too costly, you might even want to cut back in other areas of your budget so you can afford the coverage you actually need. Consider the areas that will really help your family in the event of your passing so that that money will be well-spent.
3. Waiting too long to purchase
Many people don’t even think about buying life insurance until they experience an event that makes them realize its necessary. And in hindsight, you’ll realize you’re much better off when you buy these insurance plans as soon as possible. Premiums go up as your age increases, even if you’re in good health. If you develop a serious condition later in life, you’ll also run the risk of a much higher premium, or in the future, you may be denied coverage outright. Start thinking about your insurance purchase now, rather than putting it off.
4. Not reviewing your policy
It’s important to review your policy every so often to make sure it still fits with your current situation. Even if you have short- term coverage, circumstances can change during that period of time. Your policy may have made perfect sense a year ago, but after you get married, have children, or acquire assets, you may need to rethink your coverage. And if you’ve had positive changes to your health or started a better job, some events might actually reduce your costs. Don’t put your policy away in a drawer and forget about it. Take the time to review it on occasion.
If you’d like more information about our Life Insurance plans, please contact us today. We can help you provide for your family for years to come.
