Purchasing life insurance is not a task to be taken lightly. Your life insurance policy is the financial protection your family needs to survive your death and loss of income. To help you get it right the first time, we take a look at 5 of the most common mistakes people make when buying a life insurance policy.

1. Not buying enough coverage

So how much coverage do you need? When you invest in life coverage, it’s critical that you carefully estimate how much coverage your family will need in the event of your death. This is not an easy task and is best left to professionals. Your life insurance company or broker will be able to guide you through what is known as a needs analysis, a method of calculating your benefit amount based on your assets and liabilities. If you’re looking for a ballpark figure, you can also use an online life insurance calculator.

2. Failing to insure the life of a stay-at-home parent

A stay-at-home mom or dad may not make any money, but they do a lot for the family every day. Piles of laundry, endless meals and school lunches, driving here and there… How would the surviving spouse or partner pay for these services in the event of the death of the housewife or parent? Suddenly a life insurance policy makes a lot of sense, doesn’t it?

3. Not being honest with your provider

Be scrupulously honest when answering all questions your online life insurance company asks. If they learn that you have withheld any information, your family’s claim may be reduced or denied.

4. Not reading your policy documents

We are all guilty of this. The policy papers come from him, he puts them aside thinking ‘I have to read them’ and somehow it never happens. It really is essential that you read your policy documents carefully and ask your broker or provider if you have any questions. You should take special note of policy exclusions (the circumstances under which your life is not covered) and premium increases.

5. Not reviewing your benefit amount

Life doesn’t stop, does it? As your life changes, remember that your benefit amount should also increase. The birth or adoption of a child, marriage, a salary increase and a higher debt load mean it’s time to review the amount of your life insurance.