Life Insurance: Don't Make These Mistakes

Mistake #1: Relying on your company-provided life insurance plan. Many people think that because their company offers life insurance as a benefit, their family is taken care of. Unfortunately, it's usually not enough. "Most workplace policies cover one to two times your annual salary. Financial experts generally recommend buying enough insurance to replace seven to 10 times your annual salary."* Plus, what happens if you change jobs – or lose your job? Not all policies are portable. Your family's financial security is too important to take this risk.

Mistake #2: Not reviewing your coverage. When was the last time you updated your life insurance? If you've had a baby or two, odds are you need to review your coverage. You have two choices: term or permanent; however, most financial experts recommend term insurance. "Premiums for permanent life insurance are considerably higher…If your goal is to provide financial security for your children until they're old enough to support themselves, a term policy is probably all you need."*

Mistake #3: Not buying enough coverage. How much do you need? Some financial experts recommend anywhere from five to 20 times the amount of your annual salary, especially if your household has a lot of debt and children.** For more help determining what your coverage should be, contact your Primerica representative.

*USA Today, October 10, 2006
**The Wall Street Journal, June 14, 2006