So far, you might have wondered about the best route to purchase a term policy. You also might have a range of policies that aren’t aligned with your needs. But if you end up purchasing a wrong term plan, it means that you’re going to incur financial losses.
Given that uncertainties in life are a constant factor, it makes the significance of investing in a term plan bigger. A term policy doesn’t just ensure a family’s well being but it helps the family even when the policyholder passes away. But truth be told, investing in such a policy is intimidating. Unless you’re making the (below-mentioned) mistakes, know that you’re on the right track.
Mistake 1: Getting an Insufficient Insurance Cover
The prime principle behind purchasing any life insurance plan is to cover the cost of specific requirements. Same goes for a term insurance program! Miscalculating the requirements & settling for a low-ranged cover is nowhere going to help you financially stronger.
The best thing you can do is to buy such a policy, which covers around 10 times the annual income. It doesn’t matter if the coverage exceeds this amount. What matters is choosing an adequate plan.
Mistake 2: Procrastinating or Delaying
When you are young, you don’t feel the urgency of purchasing insurance coverage. After all, that’s your time when you want to invest in beautiful things, right? But it is ironic to state that there’s no best time to invest in such a plan.
Instead of getting caught between two stools and wondering ‘to buy or not to’, it is always advisable to buy the plan early. When you progress with age, you don’t have to struggle and get a considerable insurance plan in emergency cases.
Mistake 3: Considering It an Investment
You do invest in insurance coverage, but it’s not your investment. You should be practical enough to distinguish between these two facts. It’s noteworthy to state that insurance has multiple tax benefits. But many people limit themselves to a mere investment that turns out to be a gross misinterpretation later on.
Insurance happens to be a protection tool, and some plans do have maturity benefits too. However, your priority is to buy a term insurance plan for ensuring your family’s financial security when you are not there anymore.
Mistake 4: Sharing Incorrect Medical Information
When you choose to conceal medical information, the insurance company may offer you a low premium. But if your death gets traced back to a specific health condition, it may even refuse that claim. It not only becomes an undesirable situation for your family but also affects them in your absence.
So, when you choose to purchase a term policy, always ensure that you disclose your medical information to the insurance provider. At the end of the day, your family’s interests are what should matter to you the most.
A term plan acts as a financial cushion to the family members in the most unfortunate situations. Thus, avoiding these mistakes will help you prioritize your family’s interest & help them financially in the most crucial situations in life.