The ten most common life insurance mistakes and how to avoid them
Life insurance may be one of the most important purchases an individual (and/or his or her
business) will ever make. As is the case with any important purchase, it pays dividends to
avoid the pitfalls into which a buyer can so easily fall. These common mistakes can be avoided by following the simple checklist that accompanies this commentary.
Checklist for avoiding mistakes
1 An insured’s estate should not typically be named the beneficiary of insurance.
2 At least two backup beneficiaries should be named.
3 At least every three years, a written confirmation of the status of policies and beneficiaries
should be requested from the insurer’s Home Office.
4 The insurance product should match the problem. Be sure the insured has the right policy for his/her/its needs.
5 Above all, check to be sure there’s enough life insurance to provide food, clothing and shelter, and to pay off debts so that those the insured loves can continue in their present lifestyle.
6 Don’t name minors as outright beneficiaries. Consider a trust or settlement option.
7 Consider a transfer of life insurance to others to save federal estate taxes.
8 Check to see if your business or practice can provide your family with insurance on a more
9 Remember that term insurance by definition runs out and contractually becomes more expensive as you grow older.
10 Don’t buy life insurance as though it were a commodity. The knowledge of the advisor with whom you deal and the integrity of the insurer and their commitment to service can make a major difference as to how cost-effective life insurance will be.
This material was prepared to support the promotion and marketing of investment and insurance products. Lincoln Financial Group® affiliates, their distributors, and their respective employees, representatives, and/ or insurance agents do not provide tax, accounting, or legal advice. Any tax statements contained herein were not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state, or local tax penalties. Please consult your own independent advisor as to any tax, accounting, or legal statements made herein.
Lincoln life insurance is issued by The Lincoln National Life Insurance Company, Fort Wayne, IN, and distributed by Lincoln Financial Distributors, Inc., a broker/dealer. The Lincoln National Life Insurance Company does not solicit business in the state of New York, nor is it authorized to do so.
Policies sold in New York are issued by Lincoln Life & Annuity Company of New York, Syracuse, NY, and distributed by Lincoln Financial Distributors, Inc., a broker/dealer.
All guarantees and benefits of the insurance policy are backed by the claims-paying ability of theissuing insurance company. They are not backed by the broker/dealer and/or insurance agency selling the policy, or any affiliates of those entities other than the issuing company affiliates, and none makes any representations or guarantees regarding the claims-paying ability of the issuer.
Products and features are subject to state availability. Limitations and exclusions may apply.
Not a deposit
Not insured by any federal government agency
Not guaranteed by any bank or savings association
May go down in value
©2011 Lincoln National Corporation
Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates.
Affiliates are separately responsible for their own financial and contractual obligations.
ECG 12/11 Z01
Order code: LIF-PR-BRC002
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