Mistakes that people make when buying insurance

I am so glad if you have made the decisions to buy insurance, to protect yourself and your loved ones. I can guarantee that you will never regret it if you buy the right insurance.

Now, make sure you don't make the following mistakes when buying insurance:

1. Not enough coverage.
You have to make sure that your coverage is enough to provide what you intended. Consider your current and future expenses such as household, education, children, leisure, home loan, car loan, credit card, investment, health coverage and etc. Be sure that the insurance payout is enough to cover all these expenses for many years to come.

2. Period of coverage is too short.
For example: if you have a 1 year old son and you want to cover yourself until he finish university and start working, go and get at least a 25 years term plan. If you buy a 5 years or 10 years term, then you will have to renew it and during renewal, your premiums will go up. In the end, your total cost will be higher. Of course if you have the budget, you may consider a whole life plan which will cover you throughout your life.

3. Not reviewing your insurance every now and then.
People changed, their income changed, their situation changed, their life changed. So it is good to review your insurance policy every 1 or 2 years, because you may need more coverage or you may need less coverage. You will also be updated with the insurance industry progress which may have new products that can complement your existing policies and give you even more comprehensive coverage.

4. Procrastinated buying insurance.
Some people have made the decisions to plan, but in the end it never go through. They will think of so many things that is unimportant and keep delaying of buying insurance. If you know you need it, the longer you do nothing, the more vulnerable you are. As time passed by, you grow older, the premium increase, the health risk increase leading to no coverage at all.

5. Relying on employer coverage.
I always said this to my clients, "Never rely on your group company coverage, it is never designed to suit your individual needs, just consider it a bonus coverage". Please have a personal plan which covers you all the time because a company coverage will be terminated when you leave the company, leaving you with no coverage. I believe you will never work for your employer until age 100 right? You will retire someday, and if you wait to buy the insurance when you retire, you are making a very big risk because your health may not be good anymore.

6. Only buy insurance for the breadwinner.
Many people have the perceptions that only the breadwinner of the family need to be insured, because he is the one who is earning the income. But do you know the person who is looking after the home and the family has as much financial value? For example, besides giving spiritual support, a housewife provides her family with the services of child care worker, tutor, cook, dishwasher, chauffeur, laundry worker, maid and more. In the absence of such person, do you know how much you need to take care your family?

Now that you know some tips on buying insurance, do what is right.

Cheers! Have a great day.