|
 |
 |
Mistakes
People Make Buying Insurance
From the editors at WIFE |
A catastrophic loss can scuttle any financial plan, and bring your savings
to its knees. You need insurance to protect yourself against medical
costs, sudden loss of life, and loss of property or earning power.
Many people are mostly in the dark when it comes to insurance coverage.
They worry that they are underinsured, but they don't think they can
afford additional insurance, or don't know where to turn for answers to
their insurance questions.
Many people don't trust insurance agents to provide honest information.
They think that insurance agents live by the credo: "If you can
afford the insurance you have, then you don't have enough."
Life insurance is important if your family depends on your earning power
for their needs. You will need life insurance to replace your income and
provide the benefits your current income now provides, including living
expenses, education expenses and retirement benefits.
Life insurance can provide the funds to pay off debts, such as your home
mortgage, in the event of your death. It can also provide funds to pay
estate taxes and administration costs.
But not everyone needs life insurance. Here are six common life
insurance mistakes that people make, spending their hard-earned dollars
on unnecessary coverage:
- Buying life insurance if you don't have dependants. There are very few
reasons why you would need insurance coverage if you are single and footloose.
- Buying life insurance on your children. Their deaths would be a tragedy, but
you won't suffer financially if they die.
- Buying mail-order insurance unless you comparison shop for the best rates.
- Buying investment insurance, such as universal life or variable life,
instead of contributing to your retirement plans. Retirement plan
contributions are tax-deductible, while investment insurance is not.
- Ignoring disability insurance. Disability insurance is vital to your financial
health if you or your family depend on your income. And at almost any age,
you are five or six times more likely to become disabled than to die.
- Buying expensive riders on your life insurance. Riders, such as waiver of
premiums, accidental death benefits, and additional purchase options, are costly
and are often not worth the extra money.
The Women's Institute for Financial
Education (WIFE) is a non-profit organization which provides financial education,
networking opportunities, seminars, and workshops for women of all ages. |
