Life Insurance, Watsonville, CA

Before making that kind of drastic decision, consider these common life insurance mistakes -- and you might decide to buy more coverage, not less.

1. Thinking you have enough. In a recent survey of middle-income Americans, we found that while respondents generally agreed that everyone should have some level of Life Insurance, most believed that it should primarily cover bills and funeral expenses. Only 20% said life insurance should replace the income of the person who died, in order to continue to support any children and other dependent family members. The idea of having a policy that paid out seven to 10 times one's salary -- an amount that could easily make sense for someone with young children -- sounded like an attempt to sell a needlessly large policy to the respondents.

2. Not talking about it at all.

3. Relying on old rules of thumb. Traditionally, people relied on a standard "seven times income" rule to calculate how much insurance they needed. But that's not a useful measure, Easley says, because people's situations are so different. A single person with no dependents will probably need much less insurance than someone with five young children, for example. Instead, Easley recommends sitting down and thinking about "the things you want to protect." How much would it cost to support your children in the way you want? To pay for their college or pay off the mortgage?

4. Ignoring your non-monetary income. Many people, when adding up how much of their income they would need to replace, forget about the benefits that come with their jobs, such as health insurance and retirement account payments. "I have a job, and my employer pays my health insurance costs, but if I died, and that subsidy disappears, my wife would have to get health insurance without it, so it would cost more," Weisbart says. Life Insurance, then, should pay enough money to cover the new health insurance bill.

5. Forgetting the long term. People often lose track of how long the life insurance payout should support their children and other dependents after they die.

6. Thinking that it's too expensive. Many people mistakenly think Life Insurance is prohibitively expensive, Bonevento says, but it's possible to find a policy that fits both your needs and your budget. Term insurance, which provides temporary insurance over a specific time period, is more affordable than permanent insurance, which lasts a lifetime. In addition to managing financial risk, people sometimes use permanent insurance as an investment tool, as well.

7. Forgetting to update a policy. Though major life events, such as the birth of a child, marriage or divorce, usually mean it's time to update your insurance policy, many people forget to do so.


Contact us today for more ways to save and to ensure proper coverage.


Are you another Happy Customer? Let us know by clicking the image below and taking our short survey!
Happy Customer
Take a look at what our clients have to say!
Scurich Insurance - Califronia

Personal Protection Bulletin

Business Protection Bulletin

Life and Health Insurance Bulletin

This Agency is a certified IMMS member and consistently meets or exceeds the highest level of customer satisfaction.