Buying life insurance should be as important as you were making a big decision like buying a car, house or even a TV. Just like your house, a life insurance policy is your lifetime investment, and you should be taking the necessary time to do your research and understand the benefits and limits as well.
It is important to understand the options about life insurance because we need proper coverage before we commit to a policy. Do not ever rush to get the process over with!
Let’s learn the devastating mistakes that are usually made over and over by most people when they want to purchase life insurance
No clear objective when buying
It is never easy to understand the various types of life insurance. Moreover, if you are not familiar with all the jargon used in the policy. So, do not rush! You need to have a clear understanding of why are you buying it. You need to decide on one, and only then will you be able to customise the right plan in line with your objective.
In general, you need to know that there are several reasons why people are purchasing life policies.
- To protect your loved ones against your death
- To protect yourself against critical disease or permanent disability
- As an investment
- Forced savings
If you know what exactly you want, it will be much easier and help you to focus on what coverage you want and need.
Life insurance is too expensive, too complicated?
‘Life policy is so expensive.’ This is probably the most common reason why people still hesitate to have coverage. People assume that the premium on life insurance policies is costly and does not quite fit into their budget, with the increasing cost of living. According to a study held in 2019, less than half of respondents spent above RM200, for their life insurance premium per month while 18% did not have life insurance.
Taking too long to buy
A lot of people think that it is not worth it, a waste of money to purchase life insurance when they are still young. There, you procrastinate and wait too long to purchase until later! This is not wise because it is getting more expensive to purchase a life insurance policy when you get older compared to young people.
Life insurance is more affordable when you are young because of the age, together with health (less possibility of illnesses) that will affect the rate that you have to pay, leading to lower insurance costs!
Hiding information from the company
Among the things that your insurers will ask you are including the status of your health condition, your family’s medical history, occupation and many more. This is where insurers will determine the coverage and decide what rate to charge you.
And do not lie! Some people may provide false personal details on their application form in an attempt to get a lower cost of insurance.
Your insurer can request your medical records and prescription medication history from your doctor to verify the information. And if you get caught on your application, your insurer has the right to deny the coverage right away!
Overall, life insurance can be one of the most significant purchases you will ever make in your life. It is your long-term financial plan. Therefore, it is very important for you to identify what your objective is, the right time to buy and what type of mistakes to avoid, as discussed in the article!
Speak to our insurance specialists at Bjak if you need clarification and learn more about insurance!
(Sources: Malaysian average monthly insurance premium)
