Life insurance can be an extremely important, even essential, part of your financial plan. One of its most attractive aspects for many individuals and families is the death benefit of the policy—the money that the insurance company pays out in the event of the insured’s death.
But navigating the life insurance landscape can be tricky—and people often make costly mistakes. Three of the biggest we see regularly:
Buying too much—or too little—insurance due to a lack of understanding of their true financial needs
Paying for life insurance using a less-than-ideal method or executing that payment method poorly
Misunderstanding life insurance’s purpose and the reasons for having it
In order to make smart life insurance decisions, there are three questions you need to ask yourself and answer.