Nearly everyone needs life insurance, but the process of selecting and signing up for an appropriate plan can seem daunting. Most people approach life insurance with the primary goal of protecting their loved ones in the event that they unexpectedly pass away. That said, it’s important to keep in mind there are several mistakes you should avoid when getting a policy. Whether your main concerns are financial security or just peace of mind, make sure you don’t repeat these three common missteps when obtaining coverage: skimping on research and comparison shopping, avoiding conversations about death, and underestimating your need for long-term care. In this blog post, William Schantz unpacks what each one means and offers tips to ensure that you get the best possible plan for your specific situation.
William Schantz Lists Three Life Insurance Mistakes To Avoid
1. Not Buying Enough Coverage: One of the biggest mistakes people make is not buying enough life insurance coverage, says William Schantz. It’s important to do some calculations and determine how much coverage you really need – because if you buy too little, it won’t be enough to provide for your family when you’re gone. A good rule of thumb is to aim for coverage that equals 8 to 10 times your annual salary. According to the Insurance Information Institute, almost one-third of people say they don’t have life insurance because they think it costs too much – but in reality, term life policies are very affordable and can provide valuable financial protection.
2. Not Doing Your Research: Buying life insurance isn’t a decision you should take lightly – so it’s important to do your research before making any decisions. Many people don’t understand the death benefits, riders, and other features associated with life insurance policies – so it pays to read up on everything before you commit. Doing your homework now can save you from making costly mistakes later. A survey conducted by LIMRA found that 57% of Americans mistakenly believe that life insurance only covers you for a few years when in fact, most policies can offer lifelong coverage.
3. Not Updating Your Policy: Life circumstances change over time, and as your situation evolves, it’s important, as per William Schantz, to update your life insurance policy accordingly. If you get married or divorced, have children, change jobs, or experience any major lifestyle changes – make sure to review your policy and consider an adjustment if necessary. According to the National Association of Insurance Commissioners, 6 in 10 life insurance policies are outdated and do not reflect the policyholder’s current situation.
For example, a married couple with two children may want to increase their coverage to cover their growing family’s financial risks. Without keeping an eye on your policy and making adjustments as needed, you could be leaving your loved ones financially vulnerable when you pass away. It’s important to review your life insurance regularly – at least once every two years – so that you don’t make any costly mistakes down the line.
William Schantz’s Concluding Thoughts
According to William Schantz, by taking the time to find a life insurance policy that meets your needs, you can ensure that both you and your loved ones are cared for in the wake of any tragedy. Don’t make the same mistakes, so many others have: procrastinate purchasing life insurance, buy more coverage than needed, or purchase from one of the bad apples in the life insurance industry. There is no one-size-fits-all approach when it comes to choosing life insurance, so be sure to research all potential policies and use the tools at hand, so you don’t undervalue your policy. Going with a broker or advisor can help guarantee you get the best-quoted rate and make sure no small details are missed. With proper planning, analysis, and resources, you can have complete confidence that you’re making an informed choice with whatever life insurance decision you decide upon.