Life Insurance Mistakes
When looking for the right life insurance policy, many people think that lying to their insurance provider will lead to better deals. However, any little mistakes, either intentional or unintentional, that you make on your life insurance application can lead to serious problems. Make sure to avoid these common mistakes when looking for the right life insurance policy to ensure that your beneficiaries will receive what they deserve when you are gone.
- Lying on your application – if you lie on your application, such as saying that you do not smoke, and your insurance provider finds out that you are lying, your policy can be voided. Lies on insurance policies are considered “material misrepresentation,” and they have the choice to deny your policy when you are gone.
- Missing your payments – missing just one payment will not completely kill your policy. Most insurance providers offer a 30-day grace period for late payments. If you miss your premiums for a significant amount of time, your insurance provider can cancel your policy, and require another medical exam before your policy can be reinstated.
- Not telling your loved ones about your policy – if your loved ones do not know about your life insurance policy, they will not be able to collect the death benefit. Most insurance providers will check different databases for beneficiaries after you are gone, but they are not always foolproof.
- Death due to suicide or risky behavior – some life insurance policies will not provide a payout if you pass away while involved in some risky activity, such as criminal activity, or if you take your own life. Keep in mind that each insurance company is different, so make sure to check with your policy to see if there are any restrictions on life insurance claims that you can make.