Few things in life are as distasteful as the topic of life insurance, but perhaps that underscores the importance of it. Life insurance plays a vital role in protecting your family should the worst happen. In order to ensure their financial security, you must do your homework and avoid these common mistakes.

Don’t Choose the Wrong Type of Policy

There are two basic types of life insurance policies: term life insurance and permanent life insurance.

Term life insurance provides financial protection for a specified period of time, such as 10, 20, or 30 years. It is ideal for people looking to simply pay some final expenses and provide income replacement for their remaining spouse and other dependents.

Permanent life insurance provides more than the death benefit; it offers a long-term savings or investment component with a cash value. Whole life, universal life and variable life are all examples of permanent life insurance. Permanent life insurance is very complex and offers many possible outcomes.

In order to make sure you are purchasing the right type of life insurance policy, you must fully assess your goals for the policy and weigh those goals with your budget.

Don’t Underestimate Your Needs

Calculating how much life insurance you need depends on a variety of factors including your age, your overall health, your life expectancy, your income, your debts and your assets. If you just pick a number with no rationale behind it, you may leave your beneficiaries with little financial security upon your death. Also, don’t assume you don’t need life insurance for a non-working spouse. The value that your partner brings to your family is immeasurable, and you may need life insurance proceeds to help the surviving spouse fill in gaps in housekeeping, childcare and much more.

Don’t Forget to Shop Around

Be sure to shop around and compare rates from a few different insurance companies. We can help you get quotes from various insurers to make sure we are finding the best policy for your needs and budget. We can also help you make sure you are comparing accurate quotes for similar policies.

Don’t Focus Only on Price

Don’t let the cost of life insurance keep you from purchasing it altogether, or make you purchase inferior coverage. Life insurance is vital to your family’s survival without you—can you really put a price tag on that?

The cost of life insurance depends on the amount you need, the policy type that you choose, your age, your health and certain lifestyle factors (do you smoke, do you engage in risky activities, etc.). We can work with you to find the right type of policy and the right amount of coverage for your budget.

Don’t Wait Too Long

As you get older, premiums for life insurance get higher. Buy life insurance as early as possible, even if you are in good health. You could develop an illness later that could result in much higher premiums or in you being denied coverage.

If you already have life insurance, it is a good idea to review your policy at least every five years to ensure that the policy is still meeting your needs. The amount of coverage and the type of policy you need will likely change over time as you take on more responsibility and as your family grows.

Life insurance is very complex. If you are considering life insurance, you must seek counsel from an insurance agent who is experienced and knowledgeable about all of the life insurance products that are available.

Are you considering life insurance? Do you already have life insurance but need to review your policy?