Five Life Insurance Mistakes to Avoid

KALAMAZOO, Mich. - Dec. 9, 2015 - PRLog -- Potential pitfalls and how to avoid them

It's a fact of life – insurance. You know you need it, and you want to protect your family from life's unexpected events. But you might not know where to start. And if you already have life insurance – through your employer, for example – it might not be enough.

With so many choices, it can be somewhat daunting to figure out what makes sense for your family. But, having a partner who knows you – and what's important to you – can help. An Edward Jones financial advisor can work with you to incorporate the appropriate protection for your family's needs.

Although sometimes overlooked, life insurance is an important part of your overall financial strategy.

There are five common mistakes you should be aware of as you think about protection against life's unexpected events.

1. Guessing how much life insurance coverage you need

You want to be certain about the protection you have in place for your family's future. There are a few things to consider when it comes to the amount of life insurance coverage you need:

• Debt – How much debt do you have (mortgage, car loan, etc.)?

• Income replacement – How much income will your family need should something happen to you?

• Planning for the future – Do you want to help pay for your child's or grandchild's education? Do you want to leave a legacy for future generations (charitable donations)?

• Health care expenses – Are you prepared for unexpected medical expenses (disability, long-term care, etc.)?

2. Choosing the wrong type of policy (term or permanent)

Depending on your family's needs and goals, you'll want to weigh your options.

• Term insurance is the most basic type of insurance. If you choose term insurance, you will be covered for a specific time frame, such as 10 years, 20 years, etc.

• Permanent Insurance can provide protection over your entire lifetime and build cash value at the same time.

3. Relying solely on insurance provided by your employer

Even if you already have some life insurance coverage at work, chances are your safety net isn’t big enough.

• Those with families and bigger financial obligations – like a mortgage – may need more than what they would get from employer-provided life insurance, which is rarely more than three times an individual's annual salary and can be as little as six months' salary.

• Relatively low benefits are not the only reason to consider supplemental coverage. Employers may drop life insurance benefits, or employees may change jobs and find their policy isn't portable.

4. Neglecting to designate beneficiaries

Naming beneficiaries can help ensure that your proceeds go directly to those whom you intend – thereby helping them avoid probate (the legal process of distributing your estate), which can save time and expense for your family.

5. Ignoring your policies

You should review life insurance policies at every life event, or at least every three to five years.

• Your life circumstances can change over time. If you've experienced a milestone event such as a marriage, a new baby or a divorce, you'll want to ensure your loved ones are provided for.

Your options

Whether you're considering buying life insurance for the first time, or you already have a policy in place, an Edward Jones financial advisor can help you evaluate the options that make sense for your family's goals.

Important Information:

Edward Jones operates as an insurance producer in California, New Mexico, and Massachusetts through the following subsidiaries, respectively: Edward Jones Insurance Agency of California, L.L.C., Edward Jones Insurance Agency of New Mexico, L.L.C., and Edward Jones Insurance Agency of Massachusetts, L.L.C.