Life Insurance policies are to provide your family a financial safety net. This sounds pretty simple but there are huge decisions to make like how much to buy can become complicated and these mistakes can be costly.


1. Purchasing too much or not enough of a policy.

 Not everyone needs life insurance. If there is no one else depending on your income, you most likely don’t need much or one at all. 


 But those with a spouse or young children will need a lot. For head of household the rule of thumb is to purchase a policy that’s at least seven times your annual salary plus money to pay off debt you may have.


2. Purchasing the wrong policy

Term policy is the easiest to understand, has the lowest price and offers coverage for a certain period of time. The policy will pay out if the policyholder dies during that term.


Permanent policy tends to cost more than term but offers many additional benefits. This policy lasts your entire life and includes cash values, which grows over the years. You can also borrow against it.


 Whole insurance is much like permanent life insurance policies. It provides lifelong coverage and includes an investment component known as the policy’s cash value. The cash value grows slowly, tax-deferred, meaning you won’t pay taxes on its gains while they’re accumulating.


 When choosing a plan make sure you consider all variables for your family. So, you don’t end up choosing the wrong policy.


3. Delaying to purchase a policy

It can be very easy to continue to push off buying a life insurance than thinking about how your death will affect your family. It’s a risky game of gamble especially if you have little ones.


Worrying about the cost and thinking you can’t afford it. Is the wrong approach, you would be surprised to know that it might actually be cheaper than you think. But you wouldn’t know until you get a quote. We at Cosmo offer free quotes from a few different companies to find you the best rates.


4. Relying on your works free life insurance

Most of the time life insurance benefits through work aren’t enough for those who have a family depending on their income.


Usually the coverage for the policy ends when you leave the company. Also, the coverage is typically only one to two times your annual salary which may not be enough to sustain a family after the loss of the breadwinner.


 Consider purchasing your own private life insurance policy and consider your free policy from work as a bonus.


Apply for life insurance can be stressful and tricky so find a broker to help you. Cosmo makes the process stress free and finds you the best rates. To get a free quote, call us or use the link below to fill out a form.


Cosmo Insurance Agency is an independent insurance agency serving surrounding communities in New Jersey. Cosmo keeps its promise to assure an efficient and creative approach to the services we offer. Each of our clients experience a personalized and long-term relationship with us. Our New Jersey based team of health brokers guides our clients in helping them choose the most cost-effective options. By incorporating the latest in technology-based tools and laws on healthcare, employee benefits, life insurance and finance, we keep our clients up-to-date with the plans that encompass all of their needs, whether it is individual or group insurance. 






Posted 12:00 PM

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