Insurance, for many people, is an intimidating and complicated subject. While insurance isn’t so scary if you take the time to learn the ins and outs of it, the bottom line is that most people don’t want to be in a position where they actually end up having to use their insurance. Unfortunately, unlike fires, car wrecks, or medical emergencies, death is an unavoidable inevitability, making life insurance a sound investment for anyone with a network of loved ones.
However, there are several common pitfalls when it comes to life insurance, some of them being major reasons as to why we’ve created Grandmama’s List, the first ever online life insurance registry. There are many mistakes one can make when applying for life insurance, and handling it thereafter.
If you have recently acquired life insurance or are planning to do so in the future (or if you know someone who is), you would do well to avoid these common pitfalls:
Life Insurance Pitfalls
Not Letting Your Loved Ones Know
Did you know that there are thousands of cases of unclaimed life insurance every single year? Tragically, in many of these cases, there’s a single, highly preventable cause — the policyholder not informing their loved ones about the insurance.
Indeed, many people pass away with their family being entirely unaware that they ever filed a policy. This is problematic for several reasons. First of all, your family has to shoulder the financial burden that you intended to relieve them of. Secondly, they’ll have to work tirelessly to find out if you ever filed for insurance, and they might not even end up finding it if you didn’t leave the right information in an accessible place.
Luckily, this entire problem can be avoided if you sign up for Grandmama’s List, our online life insurance registry. Grandmama’s List keeps essential insurance information on file, which can be accessed online anywhere, at any time, by the loved ones who are acting as the chosen beneficiaries. Our goal is to prevent unclaimed life insurance for countless families in the future.
Making it Difficult to Access
The life insurance industry has proven itself to be quite the stubborn mule when it comes to adapting to the digital age. Despite the fact that more and more industries are transitioning to an online-only structure, many insurance companies still elect to do all their business in the form of paperwork.
Unfortunately, paperwork is much less easy to access than a digital file, especially because it can be lost, stolen, or accidentally thrown away.
So here’s a tip that could prevent catastrophe in the future — make sure that your life insurance information isn’t difficult to track down. Nobody picks where and when they die, and while everyone wishes to have a long and happy life, any number of unexpected tragedies could end a life at a moment’s notice, and that’s why you should always ensure that your life insurance info can be found — even if you have no intention of dying anytime soon.
Once again, we advocate Angie’s List for this. If you sign up for our list, you and your loved ones can have the peace of mind that they will never have to worry about losing your insurance information, or going through the nightmarish process of trying to recover it.
Choosing an Irresponsible Beneficiary
Although these kinds of cases aren’t as common, life insurance sometimes goes unclaimed because the chosen beneficiary isn’t proactive or responsible enough to simply claim the life insurance once the policyholder has passed.
There isn’t much to say here, except that the loved one you choose as beneficiary should be someone who can be relied on, especially if the life insurance policy is benefitting the entire family, and not just them individually. When you file for life insurance, it’s because you want peace of mind for those you love when you pass on. Would you really risk leaving that to someone who isn’t one hundred percent reliable?
Forgetting Where You Left It
It’s one problem to make your life insurance hidden away somewhere so accessible that nobody is able to access it. It’s another problem, however, if you’re so careless about your paperwork that you yourself forget its location.
For a lot of people, paperwork is paperwork — you treat it with some respect and you try to ensure its safety, but paperwork adds up quickly, and sometimes it’s easy to lose track of it all. If you really do lose your insurance paperwork, it’s not the end of the world — at least, not while you’re still alive. But it spells certain problems for your loved ones if they aren’t privy to certain information, such as the company you filed with.
Insurance information can often be reclaimed if you have something to work off of, but if your family knows nothing and they aren’t able to find your paperwork because it got thrown away in a move five years ago, they might end up not being able to access the money that you deliberately left for them. That’s another one of the many reasons why we created Grandmama’s List — no family should have to suffer due to little mistakes that happened with their life insurance policy.
Procrastinating Your Life Insurance
Another big problem is that a lot of people aren’t expecting to die anytime soon, and thus procrastinate their life insurance. The reality is that nobody can predict when they are going to pass away, and tragic accidents can happen. It’s best not to wait until you feel like you might be dying to file your life insurance — there are far too many cases where this happens, and then a tragedy ends up leaving a family without their main income earner, with no money kept in reserve to keep them afloat.
Procrastination, in general, is a bad habit in almost every area of life. Why not do yourself a favor and get ahead of the problem by just overcoming this evil now?
Not Shopping Around
Did you know that the same exact life insurance policy can vary in cost from provider to provider? Before you file for life insurance, it’s prudent to shop around extensively and look at all your options. Would you rather pay $200 a month or $600 a month for a 20-year, $500,000 policy? The answer is obvious, and it all depends on what provider you’re working with.
Furthermore, it’s good to remember that if it looks too good to be true, it probably is. There are many life insurance companies out there that are predatory and unreliable. You would do well to research the company themselves before you make any hasty decisions. Since this is the company that will essentially be providing the money that’s necessary to care for your family, you want to make sure that they’re in the right hands.
Grandmama’s List: The First Ever Online Life Insurance Registry
Many of the most common life insurance pitfalls lead to a disastrous outcome — the family in question being unable to claim the policy that was deliberately set aside for them and paid for many years over.
Grandmama’s List is an online life insurance registry where you can register your essential life insurance information into a secure online database, allowing your loved ones to access it quickly and easily if they ever have the need to.
We aim to fix the problem of unclaimed life insurance with Grandmama’s List. Want to avoid some of the biggest life insurance pitfalls? Sign up for Grandmama’s List today and ensure the future of your loved ones!