TOP TEN TRAPS

1. Failure to insure because of a head-in-the-sand attitude or a cavalier "Who cares if I'm dead, let them sell my assets" approach
   
   
2. Assuming all risks can be covered by workers' compensation, sick leave or some other form of claim
   
   
3. Choosing the cheapest option. In trying to minimise costs, people choose a plan providing insufficient cover
   
   
4. Letting your policy lapse.  Don't abandon an existing policy until you've organised a new one
   
   
5. Failure to shop around for the most suitable deal, which may or may not be the cheapest.  It's important to compare definitions, benefits and exclusions and any excesses or co-payments
   
   
6. Ignoring resources offered by independent information providers.  These can provide a useful starting point when you're first seeking cover or reviewing an existing policy
   
   
7. Not covering your spouse.  Life insurance is necessary for both partners; many primary income earners are stunned at the cost they would incur if they had to replace the person who cares for children and runs the household
   
   
8. Overlooking ways to reduce your premiums. For instance, smokers pay a loading and many companies are now starting to review premium loadings for obese applicants
   
   
9. Buying policies through the mail, from a door-to-door salesman, or over the phone.  The Australian Securities and Investments Commission has issued a warning about life insurance telemarketers who may rely on pressure tactics to sell inappropriate policies
   
   
10. Failing to seek the right advice.  This may be provided only by an authorised representative of an Australian Financial Services Licensee.

For professional advice on avoiding these traps, please contact us.

Source: Sunday Sun