These Are a Few Errors to Avoid When Purchasing Insurance for Life
The search for a life insurance policy suited to your specific needs is a difficult job. There are a variety of companies offering life insurance. Each company has its pros and co.
There are various types of life plans that offer choices.
Furthermore, mistakes may be made when registering in a life insurance policy.
Follow these steps to avoid the most commonly encountered errors when buying life insurance.
We highly recommend consulting with an Ottawa Life Insurance Advisor. It is the responsibility of an advisor to understand the various life insurance options available for Canadians and match the appropriate plan to the specific needs of a client.
Mistake 1: Choosing the wrong level of coverage
An insurance policy aims to protect loved ones if the insured goes away. It is essential to know the amount of insurance needed to protect the family members of those who are insured.
An accurate estimation takes into account factors like:
- How many kids do you have?
- Have you set aside money for your child’s education?
- What number of years of income replacement would you like to see your family receive?
- When will your spouse be retiring (if relevant)?
- The value of all assets (e.g., account in a bank, RRSPs, TFSA savings bonds, stocks).
- Balance owing to mortgage(s).
- The total amount of any other debts, such as leases, loans, credit cards, leases
- Monthly expenses, such as clothes, utilities, fuel, and food costs.
- Funeral expenses
The best method to find out the coverage amount you require is to contact Your Life Insurance Advisor for a free and no-obligation “Needs Analysis.”
Mistake 2: Not Being Forthright When Applying
There are numerous stories of people who’ve received life insurance denied due to mistakes or errors in their applications.
It is imperative to be honest and honest when applying for life insurance coverage, whether intentional or not! Most life insurance plans have medical underwriting (except those with guaranteed issues), which means you will have to meet with a physician who will take urine and blood for a chemical test, based on the insurance you’d like to have. Additionally, life insurance underwriters can access your medical documents. If something is found in your medical records (e.g., issues discussed with your physician, medical procedures you’ve undergone or had, Etc.) Be sure to mention those details when you apply.
The most common reasons why people might be reluctant to talk about include:
- Smoking cigarettes
- Alcohol consumption.
- Use of illegal drugs. Be aware that marijuana (e.g., marijuana) is not a reason to exclude you from obtaining life insurance. Cannabis users that smokeless often are insured by regular premiums when they smoke
- Depression: If you take antidepressants or have talked about treatment for depression with your physician, it is recommended to mention the details in your application.
Mistake 3: Not Getting Coverage While Healthy
It’s possible to say that this is the most common mistake people make concerning life insurance!
Finding life insurance when becoming older or suffering from serious medical issues isn’t easy. The most common option in these situations will be an assured issue plan, which provides less protection than policies that have been medically underwritten.
Term life is cost-effective at the moment, so acquiring an insurance plan for term life with a long enough period to meet your needs as you’re healthy is the method to take.
Mistake 4: Not Getting the Right Type of coverage
There are two primary kinds of life insurance plans: term life and permanent life insurance plans. Permanent life insurance plans accumulate an amount of cash and are commonly utilized for estate and wealth management.
Term life is more straightforward and less expensive and doesn’t accumulate the value of money. It’s only to safeguard against unexpected loss and is not intended to manage wealth.
Most of the time, people would be better off buying a term life insurance plan that is cheap, insurance plan and investing the premium difference (compared to permanent life insurance) to other investment vehicles like TFSAs (Tax-Free Savings Accounts), RRSPs.
Mistake 5: Illegible Application
Be sure to complete the application form with care and in writing. A condition that is hard to read can cause delays in processing an application. It could also confuse when claims are later.
The majority of people will eventually suffer from a serious health issue. Your financial situation may be significantly affected. In order to provide peace of mind for your family, we will discuss your options with you and provide guidance.
Get in touch with Ottawa Life Insurance today on (613) 454-1424 or email us info@ottawa-lifeinsurance.ca.
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