Life insurance is not a simple purchase but there are many options which claim to make it easy and stress free. However, are they the best options and are consumers making the right choices?
The 5 most common mistakes are:
Mistake 1.Buying insurance online without good professional advice
Generally, when you buy insurance over the phone from an online or tele-provider, the assessment process is seen to be simpler! In fact, the insurer really is appealing to your request for brevity and simplicity. Be wary. This type of cover can mean assessment is carried out at the time of claim.
Mistake 2. Only considering price rather than the value of the product(s) purchased
Price can play an important part in your decision to buy a protection package, but it is not the only consideration. Find out about things like:
Often people are not aware of the amount of cover they require. This is often predicated because they want to save money on premiums so they reduce the amount of cover they really need. One way to ascertain what you may need is to ask a series of questions such as:
If you were to die prematurely which option would you prefer for your partner?
Policy ownership and how you wish the proceeds of the policy distributed after your death are as important as taking out the policy in the first place. Establishing the correct ownership at the time of application or transferring the ownership at a later stage ensures that the funds get to the correct hands.
Possible ownership structures to consider:
Event changes can be monumental or miniscule. They can range from the birth of a baby to adding a new room to the house; finally going on that South Seas cruise to paying off the mortgage or achieving a promotion or re-entering the work force.
Every time you achieve a significant milestone in your life you need to have a recalibration of your protection package. Have a talk to your adviser as maybe they can save you some money, get you better value for money, and open your eyes to the real needs of your family.
The 5 most common mistakes are:
Mistake 1.Buying insurance online without good professional advice
Generally, when you buy insurance over the phone from an online or tele-provider, the assessment process is seen to be simpler! In fact, the insurer really is appealing to your request for brevity and simplicity. Be wary. This type of cover can mean assessment is carried out at the time of claim.
Mistake 2. Only considering price rather than the value of the product(s) purchased
Price can play an important part in your decision to buy a protection package, but it is not the only consideration. Find out about things like:
- The capacity of the insurer to pay
- What benefits are included and excluded
- How tight are the policy wordings
- Claims payment capabilities and procedures
- Regular reviews by a competent adviser
- Ownership options
- Loyalty benefits
Often people are not aware of the amount of cover they require. This is often predicated because they want to save money on premiums so they reduce the amount of cover they really need. One way to ascertain what you may need is to ask a series of questions such as:
If you were to die prematurely which option would you prefer for your partner?
- They could own the house you live in and never have to work again
- They could keep the house you live in and not have to work for 10 years
- They could keep the house you live in but have to go back to work in 6 months
- They lost the house and had to go back to work immediately
- They can fend for themselves
Policy ownership and how you wish the proceeds of the policy distributed after your death are as important as taking out the policy in the first place. Establishing the correct ownership at the time of application or transferring the ownership at a later stage ensures that the funds get to the correct hands.
Possible ownership structures to consider:
- Owned solely by you on your life and mentioned in your will
- Owned solely by you on your life and not mentioned in your will
- Owned solely by you on your life and left in trust
- Owned by your spouse/partner on your life
- Owned jointly by you and your spouse/partner on your life
- Insurance under a buy/sell agreement for corporate situations
Event changes can be monumental or miniscule. They can range from the birth of a baby to adding a new room to the house; finally going on that South Seas cruise to paying off the mortgage or achieving a promotion or re-entering the work force.
Every time you achieve a significant milestone in your life you need to have a recalibration of your protection package. Have a talk to your adviser as maybe they can save you some money, get you better value for money, and open your eyes to the real needs of your family.
