At the time of buying any insurance, people make lots of mistake and one should be careful of the following mistakes and try to cover them. Have a look at the five common mistakes which most people make.
- Thinking insurance is costly
Many people avoid life insurance because they have a feeling that it is very costly and out of their affordable budget. A survey conducted by an insurance research organization shows that cost of life insurance is actually three times less than the actual cost of the product. According to a report published by the US Census Bureau, it has been observed that 48 million Americans did not have any insurance in the year 2012. It is surprising to know that 30% of the American households did not have any life insurance. So, do not be scared to buy any insurance and know the cost from the agent and ask for any possible agent.
- Do not rely on assumptions or outdated figures
If your financial condition changes, need for insurance changes accordingly. If there is any deterioration of your financial condition, your need for insurance will increase to a great extent. If you renovate your home, or if the cost of building the home increases, then your home will remain underinsured if you calculate based on the past costing inputs.
- Do not buy the policy based on price alone
Many people get lured to the company offering the least premium. Do not shop based only on the amount of premium. Focus on other factors like reputation of the company and the amount you are going to get when you apply for a claim. See how much you are covered under that premium amount. In health insurance, it is said that if you pay lower premium, you need to pay higher amount when you will be visiting the doctor.
- Do not avoid reading the details
Before paying for the insurance, read between the lines of the insurance proposal. If it is health insurance, see which are the doctors and hospitals covered in the policy. Check whether any nearby hospital or doctor in your area is being covered in their network.
- Do not set the deductible much lower
The purpose of insurance is to get covered for the losses which become very difficult for you to cover. A very low deductible means your yearly premium will be too high.