9 common mistakes to avoid while buying term insurance

Term insurance provides a financial cushion for the family. If the policyholder passes away during the specified term, the beneficiary receives a death benefit. This amount is usually not taxable and provides the family with financial stability and comfort in the long run. But, choosing an insurance plan requires research. One must pick the right provider, choose the necessary benefits, and read the terms carefully. One must also avoid making mistakes when buying term insurance.

Not buying the right policy at the right time
While term insurance premiums remain consistent across the policy duration, the amount is calculated based on the policyholder’s age when applying. That’s why one should consider buying early. It results in a low annual expense across the policy term and higher savings. Still, that does not mean individuals must invest in a term insurance plan immediately after they start earning. Buying a policy is advisable only if a person has financial dependents or has taken a huge loan.

Buying for a short duration
While buying term insurance is a wise decision, one must choose the tenure carefully. Many experts recommend buying a long-term policy that remains active into one’s golden years. Sure, the shorter-term plans have affordable premiums, but the amount increases when renewing the plan down the line. Moreover, shorter-term insurance usually becomes useless in times of need.

Ignoring the riders
Many new-age insurance plans come with added benefits or riders. Two common riders are accidental death benefits and critical illness coverage. Sadly, only a few consider these because they increase the plan’s total cost. But they fail to see that the add-ons offer extra financial security. So, one should evaluate and choose the ones that best suit their needs.

Opting for an insufficient sum assured
A person’s term insurance plan must provide adequate financial coverage for their family if something happens to them. The amount needed depends on the individual’s financial status, the family’s educational needs, and lifestyle. If someone is the family’s sole breadwinner and does not choose the right amount, it can be a big mistake. In this scenario, the family may face financial hardships and struggle to maintain their lifestyle. The lower sum assured won’t last long enough to support the family until they find an alternate income stream.

Prioritizing price over coverage
Plans that provide a huge death benefit are usually expensive, but that does not mean one should settle for less. The cheapest available plan might not offer all the necessary benefits, causing one’s dependents to face financial struggles later. A little research might help one find the correct insurance plan with affordable premiums and a sufficient sum assured. If someone has to go for the cheapest plan, they should at least sign up for a few add-ons to receive suitable coverage.

Failing to compare different policies
Many term life insurance plans are available, each with different tenures and benefits. Comparing them is crucial to finding the best policy. Skipping this step may result in a higher premium and limited coverage. If someone finds comparing plans tedious, they can use online tools. Many websites list popular plans from different insurance companies and allow users to compare their coverage amounts, premiums charged, and features to help them make an informed selection.

Hiding information while applying
The declarations in the policy application form the basis for the insurer to determine whether they can cover one’s life. They also help decide the premium amount. If one enters incomplete or incorrect details, the insurer cannot assess the risk properly. That’s why they tend to reject the claims of many policyholders. To avoid this situation, one should be fair and truthful in their declarations. Being open and 100% honest with the insurance company will ensure the family receives the claim amount without hassle.

Picking inappropriate customizations
Several insurance companies let people tailor their term insurance plans to cater to the family’s unique needs and priorities. Sadly, many make mistakes when customizing their plan. For instance, they choose the lump sum payout option even after knowing their family cannot manage a large sum of money. Similarly, some choose the limited pay option even after knowing an unstable income in the future could pose challenges for their family. These mistakes may seem negligible, but they could cost the family severely in the long run.

Not reading the policy terms
Before buying term insurance, one should read the terms and conditions thoroughly. Omitting this step can be costly. Reading the policy terms lets one know exactly what the plan covers. If someone has any confusion or queries regarding any clause in the policy, they can ask the agent immediately for clarity.

Term insurance acts as a financial security tool for the family. It gives the policyholder peace of mind as they know their family will be safe even if they are not around. But one should be careful when buying term insurance and avoid making mistakes. One should also review the coverage sum after regular intervals to ensure it is adequate for the family. This is an important step because the family’s financial needs may change over time.

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8 mistakes to avoid when picking a dental plan

One may often address every aspect of their overall health but forget to account for dental needs. However, oral health needs to be at the forefront of one's healthcare goals, and one should be more focused on getting an ideal dental plan to suit their needs. Since this might be a new expenditure avenue for many, it is crucial to avoid these eight errors that may result in spending extra on a dental insurance package. Making an impulse purchase Most individuals may rush their decisions because they are short on time. In the case of dental insurance, making an impulse purchase could result in buying an unnecessary plan. The individual should ensure they take their time to understand each aspect of an insurance plan before deciding. Additionally, one should never pick up the first plan they find online. An individual should compare multiple insurance options before narrowing it down to a single preference. Going for the lower rate The rate of dental coverage can play a massive role in one's decision-making process. While a low-premium may cost less in terms of coverage, the individual might need to pay higher amounts for complex dental treatments like implants, braces, and bridges. A lower rate may also mean some services are excluded from overall coverage. The lower plan may also come without a rate guarantee, meaning the prices rise after a year. In this scenario, one will have to look for another plan that suits their needs all over again. Therefore, one might be better off looking for a plan that may charge more but offers value-for-money services. Overlooking group dental coverage One may make the mistake of not checking whether they qualify for group dental coverage and pay for expensive individual coverage. One may have dental insurance benefits available through one's employer or other group coverage programs like the Affordable Care Act marketplace health insurance policies, AARP, or public programs such as Children's Health Insurance Program (CHIP), Medicaid, and TriCare for the military. Such group dental plans are cheaper than individual insurance and may have better benefits. But, one should ensure they read every detail about a group plan before deciding. While a group dental plan might be the best way to secure insurance, an individual may have better options. Not checking in-network dentists Signing up for dental insurance without checking the in-network dentist list is one of the most common errors an individual can make. If one has a dentist they prefer, they should ask which insurance plans are accepted at the establishment. An indemnity insurance package may allow one to use the dentist of their choice, but HMO and PPO plans may limit an individual to dentists in their networks. In this case, the dentist may or may not be in the network. The best way to assess this situation is by speaking to the concerned dentist or asking the insurance company about their tie-ups. Ignoring policy terms People often ignore the terms of a policy and sign up for it based on the highlighted features. However, this is a grave mistake that may result in one missing out on various benefits or paying an exorbitant cost on their insurance plan. For instance, while a plan may cover dental implants, gum disease treatment, dental implants, and complete dentures, the terms may require one to wait an entire year before the benefits are activated. So, it is crucial to read the terms and conditions of each policy thoroughly before signing up for the plan. Negligible clarity on discounts Companies usually show their dental discount rate as 25%. However, this is the amount of savings below the average cost of dental procedures for a particular geographical area. Not all dental insurance companies will calculate discounts the same way. The percentage may indicate the best-case discounts for a particular region or an offer available only with a select group of dentists. One should get complete clarity on how the discounts apply before signing up so they do not get overwhelmed with the dental costs later. Misunderstanding the total cost of care An individual shopping for dental insurance may focus solely on the price of premiums in a plan but fail to consider other health expenses. Various factors help determine the total annual cost of healthcare. A few include copays, coinsurance, deductibles, out-of-pocket maximums, and prescriptions. One should add up what they have spent on healthcare in a year to determine the best option for themselves and their family members. Putting off speaking with a healthcare provider Most individuals will have a healthcare provider that they frequent. Not taking their advice could negatively impact one's process of finding the ideal insurance provider. The expert may help determine if one needs any expensive services and the right coverage option. The dentist may also help offer ways to save money. For instance, if an individual is nearing the policy's annual coverage cap, a dentist might be able to recommend services that can be spread out into the next calendar year. Some dentists may offer in-house dental membership programs or discounts for up-front payments.