1. Failure to Shop and Compare Prices
Premiums vary significantly for the same life insurance policy, from different companies. This is because they use different actuaries and their claims experiences vary. No one life insurance company has the best premiums for each person or situation. So it pays to shop around for the best rate
2. Not Buying Enough Life Insurance
Most people do not pay much attention to the adequacy of their sum assured. In the event of your demise, your dependents lose the income that you brought home each week/month. To replace your income, how much investment capital would your dependents need for a given period of time? You need to determine this so that you will not under-insure. Good enough, over-insurance is rare in life assurance.
3. Buying the Wrong Kind of Life Insurance
Most people buy life insurance policies they don’t need or understand. They buy policies just because the life agent was able to convince them to take the plan even when they don’t need it!! How many people know that an Endowment Life Assurance policy is not good for someone who has investment as his major goal? Yet, so many life assured who had the intention of purchasing investment-linked plans had Endowment policies thrown down their throats only to realize that they got less than what they had invested on the maturity of their policies!!
You need to talk to the experts.
4. Failing to Get More Than One Opinion
When you buy a life assurance policy from a life assurance agent, that agent is paid a commission by the life company. Commissions are legitimate earnings of the agents. They are sales fees built into every policy. The same policy sells for the same price, no matter from who or how you buy it.
Consumers of Life assurance rely on agents to provide advice about which policy is best to buy, how much to buy, etc. Doesn’t it make sense that the agent who provides you with the best advice deserves to be the agent rewarded with the commission that your purchase will generate? The big question is, “How can you be sure you are getting the best advice?” when the agent is interested in the Commission.
Some policyholders spoken to complained that they lacked understanding about the policy they had purchased. They felt that the agents conned them because the commission rate was higher for the type of policy than what they would have bought.
You need to obtain a second opinion. You can talk to another agent from another insurance company so that you get the best bargain and benefits. After all, a good agent has the responsibility to ensure that you have enough coverage and at the best rates, so that if the unthinkable happens, your family can carry on without a financial catastrophe
