Life assurance is among most critical components of the financial plan of an individual. However, there are many misunderstanding about life assurance, mainly due to the way assurance products have been sold over the years. This article highlights some of the most common mistakes to avoid when taking Life insurance Mississippi.
Underestimating assurance requirement: Many buyers of this type of assurance select their sum assured based on the plans sold to them by their agents and the amount of premium they can afford. This a wrong approach. Your assurance requirement is a function of your financial situation and has nothing do with what products are available.
With such an increasing number of women health issues, women should not keep themselves without a L/I cover. Again 1 in 3 people are likely to suffer from critical illness. This way, L/I cover is vital for both men and women. Ignoring a L/I cover could prove fatal as your family would be left with many financial burdens.
If your investments other than L/I are passed to beneficiaries, in most cases, the investments will not pass tax-free to the beneficiaries. Term assurance is considered temporary assurance and can be beneficial when a person is starting out life. Many term policies have a conversion to a permanent policy if the insured feels the need shortly,
How do you choose the cheapest policy? Many assurance buyers like to buy policies that are cheaper. This is another serious mistake. A cheap policy is no good if the assurance company for some reason or another cannot fulfill the claim in the event of an untimely death.
Mortgage cover would do! The mortgage is a common thing in the UK. People who have a mortgage should also go for this cover so that in case of their accidental death, the insurer would pay the remaining mortgage amount. The facts do not point to any such awareness in the Mississippi.
Treating this assurance as an investment and buying the wrong plan: The common misconception about life assurance is that, it is also as a good investment or retirement planning solution. This misconception is largely due to some assurance agents who like to sell expensive policies to earn high commissions. If you compare returns from life assurance to other investment options, it simply does not make sense as an investment.
If you are a young investor with a long time horizon, equity is the best wealth creation instrument. Over a 20-year time horizon, investment in equity funds through SIP will result in a corpus that is at least three or four times the maturity amount of the assurance plan with a 20-year term, with the same investment. Life assurance should always been seen as protection for your family, in the event of an untimely death.
Underestimating assurance requirement: Many buyers of this type of assurance select their sum assured based on the plans sold to them by their agents and the amount of premium they can afford. This a wrong approach. Your assurance requirement is a function of your financial situation and has nothing do with what products are available.
With such an increasing number of women health issues, women should not keep themselves without a L/I cover. Again 1 in 3 people are likely to suffer from critical illness. This way, L/I cover is vital for both men and women. Ignoring a L/I cover could prove fatal as your family would be left with many financial burdens.
If your investments other than L/I are passed to beneficiaries, in most cases, the investments will not pass tax-free to the beneficiaries. Term assurance is considered temporary assurance and can be beneficial when a person is starting out life. Many term policies have a conversion to a permanent policy if the insured feels the need shortly,
How do you choose the cheapest policy? Many assurance buyers like to buy policies that are cheaper. This is another serious mistake. A cheap policy is no good if the assurance company for some reason or another cannot fulfill the claim in the event of an untimely death.
Mortgage cover would do! The mortgage is a common thing in the UK. People who have a mortgage should also go for this cover so that in case of their accidental death, the insurer would pay the remaining mortgage amount. The facts do not point to any such awareness in the Mississippi.
Treating this assurance as an investment and buying the wrong plan: The common misconception about life assurance is that, it is also as a good investment or retirement planning solution. This misconception is largely due to some assurance agents who like to sell expensive policies to earn high commissions. If you compare returns from life assurance to other investment options, it simply does not make sense as an investment.
If you are a young investor with a long time horizon, equity is the best wealth creation instrument. Over a 20-year time horizon, investment in equity funds through SIP will result in a corpus that is at least three or four times the maturity amount of the assurance plan with a 20-year term, with the same investment. Life assurance should always been seen as protection for your family, in the event of an untimely death.
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