Commonly made mistakes when it comes to buying life insurance

There are so many different types of life insurance policy it can be difficult to decide which is the most suitable for you and your family. Whether you are looking for cover that stays the same for a fixed period, or one that changes over time, there are plenty of options to choose from. Make sure, however, that you know exactly what it is you are opting for, or you could end up with less cover than you thought you had, or much more than you need.

One of the most common mistakes people make when buying life insurance is to opt for a low monthly premium rather than choosing a policy with a sufficient level of cover. It is important to make sure that your family will be able to cope with the financial strain should anything happen to you, so make sure you take this into account when looking for the best deal.

If you can afford to do so, it could be worth getting a whole of life insurance policy. This means you will pay premiums for a certain length of time, but that at the end of your payment period, your life will continue to be insured until you die. Although this type of cover is often more expensive, it could offer better value in the long run and will also afford you peace of mind.

Alternatively, you could opt for one of the many level term life insurance policies on the market. Level term policies will give you a fixed premium and a fixed amount if you die during the policy timeframe. You can also choose decreasing term (sometimes referred to as mortgage protection cover) or increasing term insurance.

It is important that you understand exactly what type of cover is being offered as conditions vary from one provider to another. And avoid simply buying a life insurance policy from your mortgage lender, or from the company that you buy another type of insurance from; this can end up costing more in the long run.

Some people are also confused by additional types of cover, such as critical illness and disability cover. These can often be bought separately or in addition to traditional life cover and can provide additional insurance should you be diagnosed with a listed illness or be unable to work because of injury. Make sure you find out exactly what you are being insured for.

The three golden rules of buying life insurance are as follows: find out exactly what is included in the policy and make sure it matches your requirements; get the appropriate level of cover; and shop around to make sure you get the best possible price!

Daniel Collins writes on a number of topics on behalf of a digital marketing agency and a variety of clients. As such, this article is to be considered a professional piece with business interests in mind.