While buying life insurance is a good investment for the future, many people make mistakes when they purchase their policy. The good news is that insurance agents are qualified to help guide seniors and their families through the life insurance buying process.
Read on to learn more about the top life insurance mistakes your clients are making and how to help them, then contact American Senior Benefits for more information.
Top Life Insurance Mistakes Your Clients Are Making
Learn about these common life insurance mistakes so you can help your clients avoid them.
Neglecting to Purchase Life Insurance or Buying it Too Late
The topic of life insurance is one many people avoid. No one likes thinking about their own mortality but avoiding it or waiting too long can cost your clients. Life insurance is most affordable when people are young and healthy. Your clients who neglect this important part of their financial plan may end up unable to purchase a policy when they are older — or they may pay much more.
Buying the First Policy They Find
Sometimes people shop for life insurance without an agent, and they end up purchasing the first policy they find or qualify for — regardless of whether it is the best option. Not shopping around for insurance costs policyholders. As their agent, you can help your clients find the best rate and options for their needs by comparing companies. With so many life insurance companies competing for business, comparing rates is the best way to find the lowest one.
Purchasing the Wrong Policy or Benefit Amount
Many people need help understanding how much coverage they need and what life insurance policy is best for their family. You can help your clients understand if a term or permanent life insurance policy is best and run calculations to show them the benefits of each policy.
Every client has different needs and plans for their life insurance benefits, so make sure to talk with your client and their family about how they want the proceeds to be spent and how much they want to leave their beneficiary.
Not Updating or Communicating Their Policy After Purchasing
Because life insurance can be an unpleasant topic for some, your clients may purchase their policy and forget about it. But it is important for your client’s family and beneficiaries to know about the life insurance policy and to have the details handy.
The beneficiary should at least have the insurance company’s name, telephone number, and policy number. Your clients should also review their life insurance coverage periodically as their needs change. For example, if your client purchased life insurance when their children were born, they may need less coverage once those children are settled adults. Make sure to review your client’s life insurance with them annually or when major life events happen, like births, deaths, divorces, and retirements. This will help to ensure your client’s coverage keeps up with their life.
Naming the Wrong Beneficiary
Help your clients and their families understand who should be named as beneficiary. If your client wants their minor children named, they will need to use a trustee until the children reach the age of majority.
Naming their estate as the beneficiary can also create unnecessary burdens since the proceeds of the life insurance policy will be held until the estate settles, which can be a lengthy process. The proceeds become part of the estate, too, meaning they could be targeted by creditors instead of the full proceeds going to the intended beneficiary.
Also, make sure your client updates their beneficiary as needed if their intentions change — and consider naming a secondary beneficiary.
How Do I Learn More?
To learn more about the top life insurance mistakes your clients are making, contact us at American Senior Benefits. Our affiliated experts will be happy to answer any questions you have.
