When it comes to insurance, you will get a lot of information, both online and from your advisor, most of which will only mislead you. Insurance may be confusing, and even some experts will still give you advice that you will heed to then come to regret later. A lot of people have admitted to having regretted advice they took, and most of these people usually end up canceling their insurance policies or paying heavily for making the wrong decision.
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It is okay to seek advice if you are interested in insurance, but you should know what to take and what not to take if you want to avoid future frustrations. That said, below are 5 things your advisor will probably tell you that you should ignore.
You Don’t Need Insurance If You Have no Children
One of the worst advice you will get about insurance is that you don’t need any if you have no children or other people who depend on you. Even if you are single and you don’t plan on starting a family ever, you will still need to secure an insurance policy.
You should know your funeral expenses will cost about $10,000 or even more. An insurance policy will help pay off these expenses, and the burden will not be left for your family and relatives to take care of. Also, you should put in mind other financial obligations that you have that may need to be paid for after you are gone. This way, you will not be leaving any financial burden with your loved ones.
You Need Whole Life Insurance
Any insurance expert, especially an agent is likely going to tell you that you need whole life insurance. The truth is that you don’t. And chances are that the insurance agent is more interested in making a huge commission from selling you the policy than actually helping you get the best insurance for you.
Whole life insurance is ridiculously expensive, and unless you are earning a pretty good salary and need life insurance for estate planning purposes. You don’t need to pay for the hefty premiums, most of which cost 10 times more than what you would pay for term insurance.
Your Best Option Is the Cheapest
This is one of the biggest lies that an advisor would ever give you. When choosing an insurance policy you need to know the cheapest option might not be the best option for you. The worst thing you can do for yourself is to put the most weight on the price alone.
Apart from the cost of the policy, there are other long term factors that you will need to consider before making a final decision. It may only seem logical to pay cheap premiums, as long as you are getting coverage, but looking at your overall goal, this may have hard consequences on you in the future. According to InsureChance, the lowest quote on the quote engine isn’t the lowest quote for you if you’re a high risk to the insurance companies.
Instead of choosing the cheapest option, compare the option you have and choose what will suit both your current and future needs.
A Medical Exam Is Unnecessary
No one should tell you that a medical exam is unnecessary because it is! You don’t want to be skipping that medical examination then end up paying higher premiums than you would have paid if you took it. Also, skipping the medical exams means that you will get lower coverage than someone else who chooses to take it.
This is a risk you don’t want to take, so take care of your body, avoid or quit smoking, exercise to keep fit and maintain a healthy weight.
Your Employer’s Group Insurance Policy Is Enough
At work, your employer may offer you an insurance policy, and while it is always a good idea to take it, do not solely rely on it. Group insurance may be a good addition to your individual policy, but it can never be good for you alone. Remember, such policies are usually based on the whole group, so your individual needs will not be considered.
In such a case, everyone is getting the same type of coverage, regardless of whether you are healthy or not, old or young. In addition, a group insurance policy may not have enough coverage to pay off your final expenses and support your loved ones after you are gone.
Unlike an individual insurance policy that you can keep, if you stop paying premiums or when you voluntarily leave your job, you will lose your insurance. You will probably not stay at your current job forever, and you might want growth in the future, but that group insurance will not go with you when you choose to leave your job.
Research Your Options
Before setting out to go look for an insurance policy, do some research because you will need it. It will be easier for you to look for a policy when you have an idea of what you are looking for, even if you will seek an advisor to guide you through.