Common Mistakes When Buying Life Insurance

Even though it has a myriad of benefits, prospective customers can buy the wrong life insurance product or not according to their needs. What are some common mistakes customers make when buying life insurance products? Here are some things you should know before buying a life insurance product.

Although life insurance has a myriad of benefits, there are some common mistakes that prospective customers often make when buying life insurance. Thus, the benefits of life insurance are reduced. What the hell?

1. Miscalculated the sum insured

Sum Insured (UP) is a number of funds that can be disbursed if there is a risk of death. Of course, calculating UP cannot be arbitrary. If the UP is too large, it can burden the customer's premiums. Meanwhile, if it is too little, it is not enough to finance the needs of the family. So you can calculate how much funds are needed by the family if left by the backbone.

2. Buying at the wrong time

The benefits of life insurance will be felt when you have dependents. If not, you can prioritize buying health insurance in advance to anticipate expenses if you are sick.

3. Focus on the benefits of investment over protection

Although unit link products offer investment, of course, don't equate it with a pure investment portfolio. The reason is that investment in unit links is not optimal because it is mixed with insurance needs. The investment results obtained will be deducted for insurance costs. It is better for you to buy pure life insurance products and invest separately so that the benefits are maximized.

4. Wrongly registering the insured

Most people register their children as life insurance insured. Actually, it doesn't matter if that's the goal. But keep in mind that the insured is the guaranteed party in the insurance. That is, the sum insured will only be disbursed when the insured dies. So it is usually the parents who are registered as the insured.

5. Purchase unnecessary additional insurance

Usually, insurance agents like to offer additional insurance that you don't really need. For example, critical illness insurance when you and your family do not have a history of critical illness. Of course, additional protection will burden the premium. So think again about additional life insurance functions before buying it.

6. Not reading the policy carefully

A policy is a document that contains the terms and conditions of insurance. Every customer must read and understand it carefully so that there is no misunderstanding in the future.