5 Common Life Insurance Mistakes

5 Common Life Insurance Mistakes from North Carolina Lifestyle Blogger Adventures of Frugal Mom

So, you’ve decided to take out life insurance. Congratulations! That might seem like a strange thing to say, but in taking out life insurance, you’re doing something that far too many people never get around to. As a population, we’re happy to insure our electronic goods, homes, cars, and pets, but we put ourselves at the back of the queue. That’s a big mistake and one that many families find themselves paying for at the worst possible time. Worryingly, almost thirty million people in America have no life or health insurance whatsoever. The number of people who have rudimentary health insurance but no life insurance is far higher. That’s why your decision not to join their ranks is a commendable one!

Even in deciding to take out life insurance or serious illness insurance, mistakes can be made, which can be costly. The whole point of taking out an insurance policy is to make sure there’s money there for either yourself or your family in the event of death or severe health issues. If you make a mistake that ultimately invalidates your insurance policy when you make a claim, you will have wasted the money you’ve spent on premiums and left yourself without a safety net. If you want to learn more about insurance, you can check this website  www.insuranceandestates.com

When it comes down to it, insurance companies only pay out when they have to. The underwriting process is all about assessing you as a risk. The greater the risk you are, the more you’ll be asked to pay. You could almost think of insurance companies in the same way as online slots websites. Although there is money to be won from online slots (and people do win money on them every day), the companies that operate them make more. They’re banking on the fact that more money will be spent on their online slots than they’ll have to pay out in prize winnings, and they’ll set their odds accordingly. Insurance companies bank on the fact that they’ll take more in premiums than they pay out in claims, and so if you give them a reason not to pay out, they’re likely to take it. Avoid the five mistakes we’re about to list below, and you’ll reduce the chances of that happening. 

5 Common Life Insurance Mistakes

5 Common Life Insurance Mistakes from North Carolina Lifestyle Blogger Adventures of Frugal Mom

Misrepresenting Your Occupation

Most online life or serious illness insurance application forms ask you to pick options from drop-down menus. Not every job turns up on those drop-down forms, so you might be asked to type your occupation in manually. That usually means that someone has to manually check your application because someone has to manually check the form, so it’s tempting just to go with a ‘closest match’ to your job and enter that instead. That could void your policy. For example, ‘engineer’ is an occupation, but there’s a big difference in risk between an engineer working in a warehouse and an engineer working on an oil rig. Be specific, and leave no room for ambiguity. 

5 Common Life Insurance Mistakes from North Carolina Lifestyle Blogger Adventures of Frugal Mom

Misrepresenting Your Weight

Many of us don’t weigh ourselves regularly. You might not even have a set of scales in your house. Therefore, it’s understandable if you don’t know your weight. Guessing, however, would be a dreadful thing to do in an insurance occupation. There’s a scientifically proven connection between weight and heart disease. If you were to pass away or become sick because of a heart problem and your medical information told your insurance company that you were carrying more weight than you’d claimed on your application, they might turn your claim down on the grounds that they were unable to account for the increased risk. Check the scales before you give a figure. 

Not Knowing Your Family History

Hereditary conditions are also of interest to insurance companies. If there’s a history of cancer, strokes, heart attacks, or other illnesses within your immediate family, it can sometimes indicate that you’re at a comparatively higher risk of contracting such a condition yourself. How many of us could swear to know our parents’ or siblings’ detailed medical history? If you don’t know, don’t guess. Should you put in a claim for a heart attack and subsequently find out that one of your parents had a heart attack earlier in their lives – regardless of whether they survived it or not – it might invalidate your claim. Ask around before completing the form. 

Not Declaring Hobbies And Interests

Not all hobbies and interests set alarm bells ringing within the offices of insurance providers. You don’t need to state your hobby on your application if your hobby is baking. If your hobby is skiing or diving, you’re at a much higher risk of an accident than a baker is. Problems arise when hobbies fall into gray areas. You might not think of horse riding as a high-risk hobby, but you could be seriously injured or even killed if you fell from your horse. Insurance companies have differing opinions of what does or does not constitute a hazardous occupation, so either speak to them before you complete the form or declare anything that might be construed as even slightly hazardous. It’s better to be safe than sorry. 

Claiming You’re Not A Smoker

Insurance is very black and white about smoking. A non-smoker is someone who doesn’t smoke at all, and hasn’t done so for a long time. How long you have to go without a cigarette before you can be declared a non-smoker varies from company to company, but it can be anywhere between one and ten whole years. On the other hand, a smoker is anyone who smokes at all, even if we’re only talking about a cigar on a special occasion. Smokers pay more than non-smokers for their insurance because of the health risks connected with the habit. If you try to make a claim for an illness that could be related to smoking, you can be sure that your insurance company will endeavor to find out whether or not you’ve smoked recently. Even if you’re a social smoker, the information has to be recorded on the form. The same goes if the individual smokes marijuana, but it is possible to compare Life Insurance Quotes for Marijuana users if you shop around online. You can always take out a cheaper replacement policy once you’ve gone without a cigarette or a cigar for the required period. 

Being totally honest and upfront in the way we’ve described above might result in higher premiums, but it’s better to pay a little more for something that works than less for something that doesn’t. Be frank and open with your insurance company, and you can have peace of mind that they’ll come up with the money for you when you need them to.

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