Points To Ponder Before Buying Insurance

6 Things to ponder when buying life insurance.

Not having life insurance at all - Life insurance is there to provide a financial benefit for your loved ones after you're gone. Having no life insurance can leave your family in serious financial trouble. Yet, only 50% of Malaysian are insured. Many people, especially millennials, overestimate the cost of life insurance. However, many policies for those in good health cost barely more than a Netflix subscription.

Only breadwinners need life insurance - Most people think only the person who provides the primary source of income should worry about life insurance. If you aren't the breadwinner or are a stay-at-home parent, you may think you don't need life insurance. However, a stay-at-home parent obviously provides a huge value, and if a household were to lose this person, they'd need to pay for all these expenses. Childcare and housekeeping as expenses that would need to be covered, either by paying for assistance or having the surviving spouse step in, which could cut down on their income.

Not having enough life insurance - Not having enough insurance was another huge mistake many people make. If you only want to cover funeral expenses, understand that the median cost of a burial today is approximately RM20,000 and can range up to $50,000. For a policy that will replace your income to help provide for your family, you will need much more coverage. Generally - you should be insured 5 times your annual income.

Relying only on employer-provided life insurance - Many employers offer life insurance as part of a benefits package. But, before you think you're set with just that coverage, not so fast, experts warn. It's extremely easy to sign up for employer-provided life insurance, but it often doesn't actually provide enough coverage. Employer-issued life insurance policies typically amount to 12 or 60 months worth of salary. Where people make mistakes is making this their only option. Group life insurance likely doesn't provide a significant amount of payout, and if it does, you're paying for it. And if you swap jobs? You're in trouble."

Waiting too long to buy - Buying life insurance is not something you want to put off. Yet because it's something that people think is far off in the future, they wait too long to get it.
That can end up dramatically increasing costs. The reality is your best chance of getting an affordable rate on your coverage is when you're young and in good health. Policy premiums are going to go up if you develop health conditions or when you get older. Some won't even insure you depending on the condition. If you haven't developed anything troublesome yet, it's a good time to get insurance. Immediately.

Forgetting to update your beneficiaries - When you get a life insurance policy, you name the beneficiary i.e. the people who will get the money after you die. But this is one area where you don't want to set it and forget it because that could have serious consequences. It's a good idea to make a plan to revisit your policy consistently and update your beneficiary accordingly. That conventional wisdom is especially true after significant life changes, including marriage, divorce, or the birth of a child. The beneficiary listed on your life insurance supersedes whatever is written in your will, so be sure to update this as needed.