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As we all know, life insurance guarantees to pay some amount of money to the beneficiaries as premiums paid by the insured. This life insurance gives protection to those families who will be left behind by the insured in case of passing away. But having known this benefit, still, some people do not want to be insured, probably because of their beliefs or maybe because, no matter how good the life insurance policy is, there are still some disadvantages. And what are the disadvantages of buying or owning a life insurance policy?

First, if you are buying life insurance, you have to pay premiums monthly, quarterly, semi-annually, or annually. Therefore, you have to allot a specific budget to pay your premiums. Second, you have to continue paying for this policy for a certain period, either 10 or 20, or even more years. If you got unemployed, make sure that you have enough funds in your policy to continue paying your premium during your financial difficulties. This is called a premium holiday. Once the fund in your policy has been consumed, your policy may lapse, and the coverage may discontinue. But you still have three years to retake effect your lapse policy with certain conditions as defined by the insurance company. Third, as you get older, your life insurance policy becomes more expensive, and you are not as healthy as you were when you were younger. This is because premiums in life insurance depend on the age and health of the insured. Fourth, the rate of return in the cash surrender value is usually lesser than the number of premiums paid. This is the cash value component of the life insurance policy that allows the policy owner to save money, but the returns offered in the investment are not as high as the other investment tools. Fifth, there are some instances when the beneficiaries have been denied paying the death benefit to the policyholder because the insurance company is citing some circumstances or charges that may lead to not paying the sum assured to the beneficiaries. Sixth, the life insurance policy that includes a critical condition or accidental benefits has some prohibitions that the policyholder may not claim due to some conditions stated in the policy. This is very complex and sometimes hard to understand on the part of the policy owner. To avoid these complicated benefits that you are not sure you can claim during this condition, do not include them in your policy to make your life insurance policy simpler, cheaper, and easier to claim the benefits. Lastly, life insurance policies have exclusions. These exclusions are stated in the policy. Once proven during the payout of the death benefit, the beneficiaries may be denied the sum assured. Before buying life insurance, make sure that you fully understand the exclusions in your life insurance policy.

Every policy has its pros and cons, and as a possible buyer of life insurance, you would bank more on the pros of the policy and as much as potential cons are tolerable. However, if the cons lead your beneficiaries to be denied the first reason you are availing of life insurance, you have to think twice about buying one. Instead, be more careful of which insurance company will give you more assurance of paying the benefits you would want your family to have during your untimely demise.