Life Insurance Mistakes To Avoid
Most of us know what life insurance is: you pay a monthly or annual premium and in return the insurance company pays your nominated beneficiary or estate a lump sum when you die. Over the years life insurance has grown, with a multitude of policies to suit nearly every kind of need.
Buying Life Insurance From Mortgage Lenders When Arranging A Loan
A common mistake is buying life insurance from a mortgage lender or bank that is lending the individual money to buy a home. Banks like to cross sell a variety of products to their customers, and when individuals seek financing for the purchase of a home, they suddenly become a captive audience to the bank that is making the loan. The financial institution will try and add on a variety of insurance products in addition to the mortgage or loan they are making, and the deals on offer may not always be the best deals that can be picked up were the individual to approach an insurance adviser or a specialist.
It is better to buy life insurance from a specialist financial adviser, largely because they have a better understanding of the products on offer, and how they compare to rival products and probably have a bigger offering.
Individuals should also not be afraid to make an adviser work for their money and feel no pressure to commit. Advisers may be commission driven and financial products such as life insurance provide remuneration to advisers through a commission structure.
Life Cover Through Superannuation Fund Providers
Life insurance through your superannuation fund may seem like an easy option, but just make sure you read the fine print. A life insurance policy through your super fund may not cover you for the right amount. This means that if something does go wrong, you may be severely underinsured, leaving your loved ones with insufficient funds during an emotionally turbulent time.
Buying Life Insurance Directly Without Underwriting
Life insurance products sold directly without underwriting, often sold aggressively via television advertising, may cost double compared to equivalent cover which is fully underwritten.
Another point to note is that non-underwritten type life insurance policy often have exclusions on previous medical history.
Disclaimer:
This article is not designed to provide personal financial or investment advice. The information provided is general in nature and does not take into account your particular investment objectives, financial situation or investment needs. We recommend that you speak to an xLife specialist financial Adviser before you make any decision regarding Life Insurance, Total Permanent Disability (TPD) Insurance, Trauma (critical illness) Insurance and Income Protection Insurance. The statistics and figures presented in this report are based upon historical data, obtained from external sources. There is no guarantee or suggestion that markets will behave as they have in the past. Future results will be affected by political & economic events. Information is not directed to any particular persons investment financial objectives. Therefore, you must seek advice tailored to your individual circumstances before making any specific decisions. xLife is a Corporate Authorised Representative of Millennium3 Financial Services Pty Ltd AFSL No.244252 |
