(8) Relying Simply On Insurance Rules Of Thumb
It is the one of the worst yet common insurance buying mistakes to avoid while selecting the right policy. Generally, life insurance of an individual should be equivalent to about 12 times of the annual income.
But, two people with similar income may need different amounts of coverage. Some of the factors affecting your coverage include marital status, size of family, working spouse, dependent elders, children in college & many more.
Thus, you should wisely consider the total family income & family expenses before finalizing your policy.
(9) Dropping Your Old Policy
It is another shocking yet common insurance buying mistakes to avoid Several long-term policy owners get shocked by the recent rate hikes of 40% to 90% by their old insurer. They start looking for ways to drop their old policy.
If your insurer notifies you about an upcoming hike in your premiums soon then never take action out of frustration. As you are older & therefore a new policy will be even more costly as compared to an old policy with rate hike.
Additionally, rates of new policies are also rising even much faster than rates of old policies. However, you can manage your premiums comfortably by reducing benefit period to around 3 years.
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