Choosing life insurance online can be a lengthy process that may take weeks or even months for some individuals. Given the impact a life insurance policy can have on you and your family's future, it's important to carefully evaluate your coverage needs and make an informed decision. To ensure you make the right choice, consider what purpose you want the policy to serve, and stick with it until it meets those needs. Neglecting to thoroughly consider your options, making impulsive decisions, and giving up on your policy prematurely can be costly mistakes.
The next time you buy a life insurance plan online, avoid the following mistakes:
1. Not Analysing a plan thoroughly
If your insurer can’t cater to your needs, the decision may not be in your best interest. Make sure to carefully review the life insurance contract form before signing it. This document is crucial and often delegated to the salesperson, but it's crucial to thoroughly understand the details. Life insurance contracts are based on trust, and accurate information must be provided to avoid the risk of a rejected claim. Read the contract carefully before signing.
2. Not reading the agreement carefully
Signing a life insurance contract form is a significant step, but many people tend to leave the task of filling it out to the salesperson or distributor. However, this could be a mistake as life insurance contracts are built on the premise of good faith, meaning the insurance company takes the information provided in the contract to be true and accurate. Your health status, occupation, family history, and lifestyle information are crucial for the insurance company and any inaccuracies could result in the rejection of a claim. It's imperative to carefully review and understand the contract before signing.
3. Not verifying your policy details
After receiving your life insurance policy, take the time to thoroughly review the documents. Although the policy bond may seem lengthy, insurance companies usually present the key details of the product in an easy-to-understand format. You will also receive a copy of the contract form, benefit illustration, and other relevant information. If you find that the product benefits are different from what was communicated to you, don't hesitate to return the policy to the insurance company for correction or a refund. Keep in mind that you have a 15-day window to return the policy after receiving it.
4. Choosing the wrong payout
Making the wrong payout choice in your life insurance plan can impact how your beneficiaries will benefit from the policy. While a lump sum payout is a common option, some policies may also offer the choice of a regular or staggered payout, or a combination of both.
However, choosing the latter is not recommended. As the years pass, the value of the yearly payments may decrease due to inflation, and if a significant expense arises, the policy may not provide the required funds in a lump sum. It's crucial to carefully consider your payout options and understand their implications before making a decision.
So, the next time you buy life insurance online, be careful so that you don’t make these mistakes. Consult with advisors and experts and make sure you are making an informed decision.