By YiLin Zhu on Apr. 4 2009
Focus only on cost is the biggest mistake that most of people make when they buying their term life insurance. Of course, cost is an important factor to consider when we buy insurance. But a lot of people bought the term life insurance they really want, but also the ones they won’t afford to purchase. This may not be the right option.
Secondly, didn’t choose a right settlement options is also a big mistake you might make. There are many options to the term life insurance buyer regarding how the beneficiary will receive the policy proceeds. The most popular one is the lump sum payment, even though in many situations, this may not be the most appropriate solution. But keep in mind, you should always carefully review these settlement options with your agent.
Another big problem is not choosing the right agent. It is very important to choose a licensed agent that understands life insurance contracts and all of the options available within the contracts.
In addition, lack of conversion options also can be a big problem for the insurance buyers. An important option to have in your term life policy is the right to convert to a permanent life policy with the same company without submitting any additional evidence of insurability. This is important because need and wants change. The flexibility should be there to handle these changes.
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