Let’s talk about the top 10 mistakes that people make when they’re buying life insurance. Now this is not intended to scare you and put you in a position of fear and being worried about making the wrong decision. What we wanna do is help highlight these mistakes that people make so that you can use them as a springboard to help you make the best life insurance purchase decision possible.
Now the number one thing that people get wrong is that they don’t buy their human life value, in terms of insurance. What do I mean by that? Well, there is an amount that the life insurance company will issue you as the maximum life insurance that you qualify for. And that is the amount that you want to have in place. The reason is that if you’re just doing an analysis of what you think you need, based on maybe your mortgage, how much loans that you have that are still outstanding, how much it’s gonna cost to send the kids to college, how much you think your spouse might need to carry on their lifestyle in your absence, those numbers normally end up falling short. And they tend to lean towards having the minimum required to keep your life moving forward, or your families life, in your absence. 10 Mistakes When Buying Life Insurance You wanna make sure that your death benefit is high enough that if you are not able to live out your full length of days in your lifespan, and your time is cut short, that you still are able to fill up those wealth tanks with everything that you would have put in had you continued living and working and investing, so that your family can continue on that life that you’re wanting to create for them.
Now the second mistake that people make is not getting the right policy type. Now there’s multiple types of insurance. And we’ve talked before about term, universal, whole life. What happens here is a lot of times we swing towards what we think is maybe best in the moment for various reasons. But term insurance is something that is in force for a length of time. This is not going to be your whole lifespan. That is something that you might need to put in place if you’re trying to get your full human life value. But you’re gonna wanna make sure that that’s not where you stop. The reason is that you want a product that’s gonna be with you for your full lifespan. Now here’s a note about universal and variable types of insurance policies, and why we do not recommend them and why we don’t use them and why I would never have one on myself or my family. With those types of policies you can often run into problems where the illustration shows you putting in a certain dollar amount of premium in order to maintain that policy and keep it in force. But the cost of insurance over time can creep up to the point where you actually need to put more dollars in than what was shown in the initial illustration just to keep the policy in force. That unfortunately is a really precarious position to be in, especially when you’re facing your 70’s and 80’s and you’re looking at the time span of your life where you really need that policy to be able to pay out for you. So we wanna make sure that you have whole life insurance. Now whole life insurance will be in force for your entire life, and it will build cash value.
