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Top Eight Pitfalls Of Life Insurance

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By Author: J.J. Yong
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As life insurance has become a necessity for us today, everyone needs to pay serious attention to details when it comes to insurance policy selections as there are lots of potential gaps and pitfalls of Life Insurance policies. By getting yourself acquainted on the possible pitfalls, you will know what to watch out, what to avoid, and what to focus in, when it comes to Insurance plan selections.

1. Decreasing coverage. - Policies where the 'face value' decreases over the term of the life insurance. This works for some people but not all, you need to make sure it works for you well before you decided to go for it.

2. Inadequate coverage for disability. - Check and find out what is the maximum amount of disability benefits one can claim for, and under what types of circumstances can this disability coverage be enforced

3. No withdrawal option offer - Most Insurance policies allow withdraw on the cash value after a certain period of time. However, for some, especially those with a very low premium will not return your money. Please be cautious that there are such policies out there, and always make sure to ...
... check out the availability of withdrawal options of any policy ahead of time.

4. Depreciated value. If your life insurance policy has an investment component (your payments will be used to invest in high-yield accounts and some percentage of the proceeds will be returned to your policy), bad investment decisions made by the insurance company could leave you with a depleted face value. So check out your insurance policy cautiously before you enroll in any of them.

5. Wrong beneficiary. When you apply for any insurance plan, you have to name your beneficiary. Make sure that your insurance policy allows you to change the beneficiary at some later date if you ever change your mind or in cases where your beneficiary dies before you do.

6. Relying On Employer -term as the only Insurance plan one has. - If you change jobs, most term life plans are not portable. If your health is not great, you may have a big problem getting any new insurance plan for yourself later on.

7. Paying too much for the Life coverage. - Most people paid too much for the insurance plan due to the persuasion made by the insurance agents, where the additional money can be invested elsewhere for better return.

8. Life insurance sold by credit card and mortgage companies. - This typical type of policy offers to pay off any outstanding balance on your credit card or mortgage account when you die. These policies are with very high margin and usually it is more expensive than the term life insurance policy.
For more information about life insurance rates and life insurance companies, visit LifeInsuranceEssentials.com.

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