Being in the insurance and financial advising industry for several years now, something is crystal clear to me,
99% of People Do Not Know How to Get Life Insurance Right
As a crusader for financial education and the empowerment of Canadians financially, I feel it’s my duty to tell the public the reality. I rarely ever meet someone with the right amount of life insurance coverage as you can see in this video here.
And let me tell you Life Insurance is a key component to the financial house.
So what are the Most Common Mistakes People make when getting Life Insurance?
1. Procrastinating On Protecting Yourself
Most people don’t see the importance of getting insurance when they are still young and starting out to amass financial security. Often they think that they don’t have a need for it yet, or can’t afford it. But this is unfortunate, because the older you get, the more expensive life insurance is.
The best time to get life insurance is as early as possible. Because the benefits get more costly as we age or worse, as our health changes.
A lot of times, people only get life insurance when they start having a family, or start getting sick. But we in the industry say, “It’s better to have life insurance and not need it, than need it, and not be able to get it.” That last part is vital. And not something I would wish upon anyone.
2. Assuming Your Employers Insurance Is Guaranteed
Group or Employer and Loan/Creditor Insurance mostly offer basic and fluctuating life insurance amounts. And what most people don’t have any clue about is that they are underwritten only after a claim is made. This is extremely dangerous because the insurance company may decide not to pay if the person has underlying or undisclosed medical issues. Plus these policies are only valid while one is part of the group or working at the company. However, individually purchased policies on our own, are fully underwritten at the time of purchase before they are approved.
Considering that in the Greater Toronto Area, the average funeral is $20,000 and the average Canadian had $114,000+ of debt, its important to have life insurance to cover these needs.
3. Thinking “I Have Enough Coverage” – But Never Asking The Question, Do I?
It’s important to be transparent and realistic about the amount of coverage one needs. We need to know and take note of how much money the family will need in the event that you are no longer there to take care of them. (You are their provider after all.) Be sure to add the funeral expenses, legal fees, taxes for inheriting assets, any outstanding debts and mortgage balances too.
Don’t underestimate the financial value of members who are maintaining the home and caring for children and elderly parents either. Oftentimes, spouses buy policies on each other to make sure that the other can still take care of kids or young people, or the elderly – so the funds are there to take care of them. Make sure to add in the cost of daycare, helpers and caregivers to be able to properly predict and prepare for it if need be as well.
Final Thoughts
Being aware of the common mistakes people make will prove to be beneficial for you when choosing your life insurance policy. But the most important thing is having the right coverage to take care of your family. It really can be the difference between success and failure, love and fear, happiness and misery in your family. By avoiding these mistakes, not only will you be able to get the best bang for your buck, but you will be able to ensure your families well being when you or your loved ones pass.
If you want to make sure you are properly covered, or take the next steps to increase your financial IQ and money mindset, consider taking this free course I have available here.
I hope this has inspired you to get your financial house in order.
Thank you for reading,
Michael Santonato