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Buying life insurance for over 50 is a different undertaking than for someone in their 20s. Here are 3 of the top mistakes people make when buying life insurance for over 50.
Mistake #1: Assume youll have to Pay Outrageous Rates
Many people looking into life insurance for over 50 just assume that their rates will be a lot higher. While you will pay more than when you were in your 20s or 30s, not every company will charge the same rates. Some specialize in life insurance for older people. Some even specialize in people with health conditions. While you may have been dealing with the same agent for years, it may be time for a switch. The fact is some agents can only sell for certain companies. So get some online quotes, research a few other companies. If your agent cant help you buy from a reputable company that offers you a lower premium, then you may need to make an economic decision and find someone who can help get a better deal.
Mistake #2: Dont Bother Thinking Through your Goals
Confused by all the different life insurance plans there are out there? Bewildered by all the insurance terms? Dont be too hard on yourself: you arent alone. But you dont need to invest a ton of time in learning about every plan or programs and understand every term.
Instead, put your energy into figuring out what your goals are. In other words, what do you want the life insurance to do for you? Do you just want a death benefit to pay for your funeral? Or do you want to use the life insurance as a financial investment? If you dont know what you want to accomplish, then youre just making the whole process of buying life insurance for over 50 more complicated.
Once you know your goals, then you will be able to find life insurance products that meet those goals. You dont need to look at any others. Are you uncertain whether you want the life insurance to work as an investment for you? Then get advice from an estate planner or financial advisor, people who have no financial stake you in buying the life insurance.
Mistake #3: Fall for Promises of Big Payouts
This mistake often follows making mistake #2. If you dont know what your goals are, then youll be prone to listen to any offer that comes along. Dont let visions of a big payout keep you from seeing just how big your premiums will be. The last thing you want to do is buy a policy you cant afford.
And remember the old adage, theres no free lunch. When someone promises big payouts, ask yourself how they are making money out of the deal. Are there any hidden fees? What are the risks to you? The reality is that a deal that might make sense for someone in their 20s, who has 40 or more years to allow an investment to grow may be completely wrong for someone much older. Be especially wary of offers that name the person selling the insurance as the person who receives the death benefit.
Avoid these mistakes when buying life insurance for over 50, and youll be much more likely to get an affordable policy that meets your needs.
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