Military Finances 101: 6 Common Insurance Mistakes to AvoidInsurance Managing Your Finances
Having at least a basic insurance plan is essential for anyone. While many jobs cover your insurance needs, not all of them do. It's important to figure out what insurance plans you need and what works best for you and your family.
Choosing an insurance plan can be complicated, so when doing so, try to avoid these mistakes.
Mistake #1: Not Having Enough Insurance
Less comprehensive coverage or basic insurance plans can equate to lower premiums every month. The problem is - you’re likely to make up the difference anyway when it comes to your deductibles and out-of-pocket expenses. By not giving yourself enough insurance coverage upfront, you’re taking a gamble of whether or not you’ll actually need to use it. A fender bender could quickly cost you more than if you had paid the higher premiums upfront.
If you're married and/or have children, SGLI may not be enough life insurance coverage, depending on your rank.
Mistake #2: Over Insuring Yourself
Talk to an insurance agent to figure out the right amount of insurance for your specific circumstances. Just as you don’t want to under-insure yourself and your possessions, over-insuring could be equally as costly.
Mistake #3: Not Asking for Discounts
If you don’t ask for a discount, then you may never know if you would have gotten one or not. There are possible hidden discounts you can qualify for, but if you don’t tell your agent and ask what you can get, they will never know that they need to apply them to your account.
Mistake #4: Not Looking Around for New Policies
You should be shopping around for a new basic insurance policy every few years. In some instances - especially if certain circumstances have changed - you can save money by updating your policy or switching providers. Some insurance companies may even offer discounts based on things like where you work or where you went to college.
Just remember when shopping for Life Insurance to make sure there isn't a War Clause or Aviation Clause if you're an aviator
Mistake #5: Misunderstanding Your Policy
Make sure that you understand what your policy covers, under what circumstances it can be used and what you can still expect to pay out-of-pocket. Having a thorough understanding of your policy now means avoiding unwelcome surprises when it’s time to file a claim.
Mistake #6: Getting Rid of Long-Term Care Insurance
If you’re notified that your premiums are about to rise, you may be inclined to drop your long-term care policy. However, it’s important to remember that purchasing a new plan may cost even more, especially since you are now older than when you first purchased your original policy. And foregoing long-term care coverage altogether puts you and your family at greater risk of future financial turmoil.
Whether you’re looking at auto, life or any other insurance policy, there are plenty of considerations to keep in mind. If you are choosing a plan through your work, make sure you are speaking to someone who works at the insurance provider to get all the answers you need. If your work does not cover your insurance, speak to representatives at the insurance company and your financial advisor to help make these decisions.
If you found this article useful, you might like the following blog posts:
Military Finances 101: 5 Things to Look for When Choosing a Life Insurance Policy
Military Finances 101: Emergency Funds...Yeah, They're Important
Military Finances 101: Permanent Versus Term Life Insurance
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.