Life insurance is more than just buying an insurance policy. Here are few common mistakes to avoid while buying life insurance.
Not having adequate life cover
Buying of life insurance cover should be based on the actual need. At times, many policyholders buy policies to either save tax or to save ‘some’ money for long term needs. They overlook the right purpose for which life insurance is to be bought which is to replace one’s income in the event of an eventuality and help the family maintain the same standard of living. Under-insurance doesn’t help in meeting the objective of insurance. Ask the insurance agent to help you calculate the ‘human life value’ based on your specific life circumstances and then go ahead to provide for it through proper policies.
Not buying in housewife’s name
It is usually said that housewives or home makers do not require any life insurance as they do not earn and hence there are no family member dependant financially on them. But, consider this. Even if she is not contributing any income to the household, the opportunity cost of her absence in managing the house and children, is quite high.
Although not a norm but life insurers provide cover to them only if the spouse is insured and cap the maximum sum assured to that of the spouse. If both are working still insurance is required
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