Life is uncertain, and if you have a family, a group of dependants, including pets (we are not kidding, there have been instances where a dead widow left millions worth in assets to a pet cat), it is imperative to have a life coverage as something you leave behind for the people you love, should anything unfortunate happen to you.
1. Underestimating the need for one
There is a reason why “life insurance” is referred to as such. It should cover your lifetime and beyond that for your family’s sake after you are no longer around. If you keep on waiting to get yourself a life policy coverage, you might be leaving your own family vulnerable to some sort of depend-less life, no matter what your other half is bringing back for family financial maintenance.
It is no secret that the older we get, the more we are at risk when it comes to health issues, and your commitment to an insurance policy at a much later date will give you only a short period to cover your ideal amount and thus making your premiums more expensive.
Many keep on waiting for themselves to be debt free (clearing their housing loan for example), before committing themselves for a life policy. However by the time you do so, you may find yourself already in some sort of grave physical illness and your family will be at financial risk at a time when they need it the most.
2. Shopping on price alone
Life insurance shopping is unlike shopping for furniture. You can’t wait for discount season and no one is going to copy that designer model for cheap. Life coverage plans vary depending on the insurer, where the coverage amounts, riders and pay out policies all come into play when you shop. Your premium payments alone are the least important factors in selecting a policy.
As such, don’t let the premiums influence your decision. You can talk to as many insurance agencies and agents you want to, but you are not going to get it at a “bargain” price. They might throw you a few goodies along the way – wallets, pen, notebooks (the paper type), etc. – but if that influences you, you’re missing the point. This is not a product for current use; it’s about you, your needs and your loved ones.
Always keep in mind what kind of coverage you’ll be getting and whether it will meet your family’s needs when it does need to be paid out. Only after you get that right, can you start looking at the premiums.
3. Not choosing the right insurer
Again, we are looking at the bargain shopping mentality here. If you’re going for one simply because they roughly meet your needs and the price looked pretty decent then you’re probably going to run into trouble when you need the policy most.
It’s essential that you pick an insurer who has the right coverage for your needs that match your present stage of life. Insurers like AIA provide great options for getting insured early on with very specific options for getting insured early.
It all boils down to what you need or what your family needs when you are not around anymore. Getting the right insurer that fits your need is tantamount to finding the right doctor who can diagnose your ailments. Make sure you have one who really knows you, your situation and needs so that when you do call on them, they’ll be the best ones to help you.
4. Not comparing policies from different companies
Most insurance purchases are done when the future policy owners are approached by agents. Very few have voluntarily looked for different insurance companies, compared and signed up. These few are very prudent and do what any avid shopper would do: compare products.
While you shouldn’t compare policies on just their prices, you should definitely compare policies which are ideal for your needs from different companies. Only after you’ve achieved proper policy configurations that are similar from the different companies, can you really compare them equally.
Remember, this is a long term commitment (and a financially large one) that has some of the greatest impacts on your life. You should definitely compare to get the best.
5. Failing to review your policy regularly
Let’s face it, most of us aren’t reviewing our financial commitments as often as we should. How many insurance policy folders are lying in a dark corner of your cupboard, shelf or drawer looking dusty, dejected and basically, dead? Or do you even remember where you put it?
The point about reviewing your policy is simply this: buff it up so that it complements your current concerns about your health, the economic well-being of your family and what the world has come to since the last time you signed up for a policy.
Your coverage may have been the best choice back then when the boy bands ruled the airwaves, but times have changed. You have become older and you are looking at broods of your own and just as you have grown, your insurance policy needs to grow with you.
Keep talking to your insurance agents, most of whom you know well (former classmates or relatives turned into insurance agents are the best to confide with) on what should be the appropriate amount and premium involved, or whether you’re adequately covered for your current stage in life. If your current provider cannot provide you with the right coverage based on what you think you’ll need in the future, then and it could be time to switch.
With age comes experience, and with experience comes a beefed up income and you can surely add a little more topping to your current premiums to match your evolved lifestyle.
Fear of mortality was the main reason for the rise of the insurance industry. Like lawyers, insurance agents are seen as easy subjects for jokes but the services that they are rendering will, one day or another, end up being essential. We can never be sure of what’s in store for us in the future (or even in the next 10 minutes). But at least, if you pick the best insurance coverage, you can always be rest assured that your family will always be taken care of and that you were responsible for making that happen.
Get yourself protected from RM150 per month and learn how AIA’s GenNext Solution provides you with cash allowance in the event of an accident, and lump sum benefit for critical illnesses.
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