Buying a life insurance policy is a good move. It means you are preparing for your family's financial state in case of a death in the future. Although it is a good decision, do not forget that you might make mistakes and ruin the life insurance you already bought as listed below.

Postponing Life Insurance Purchase

When you feel like you need a life insurance policy, you need to take action immediately. Since life insurance rates increase as people's health decline and/or getting old, it is important to purchase the policy before. In fact, many insurance company will not approve your purchase if you have health problems at the same time you purchase the life insurance. Even if the insurance company gives approval, the premiums will be skyrocketed. 

Saving More Money by Purchasing Cheapest Policy

Many insurance companies offer cheap life insurance policy to attract customer. As the customer, you need to learn about their policy features and benefits. It might be a complicated process, but it will be an utter mess if you buy insurance with lowest price without investigate the policy. You may hear about convertible term policies. Convertible term policies means they can be exchanged into a 

permanent life insurance later no matter how your future health is. All you need to do is understanding of how long the conversion option is available. In addition, you have to find out the restrictions, if any, on the type of policy for purchase under the conversion privilege. 

Late Payments

A late payment can affect your policy benefits, especially if you have a universal life policy with secondary guarantees. Universal life insurance is a special permanent policy which has long term guaranteed protection at the lowest possible rate. It focuses on maximizing the amount of insurance per dollar of premium. You should make a note that some policies can be sensitive to premium payments timing. Try to not miss your monthly payment or late do the payment, more than a month or so. In case you need to postpone your payment, discuss it with your insurance company so they will take notice about the delay, usually insurance company will give 30 to 60 days late payments, 

and will not change your policy's guarantee.

Did Not Treat Insurance As an Investment

If you want investment from life insurance, consider to buy a variable life insurance policy. Variable life insurance policy is a permanent type of policy that provides life insurance protection with cash value. Your premium will be divided into two parts. One part will goes to the life insurance itself, the other part will goes to cash value. You can choose the type of cash value investment. People often consider this type of life insurance as supplement for their retirement income. To maximize the cash value growth, you need to make sufficient premium payments, while paying less than planned will affect the cash value availability. 

Borrowing From Your Policy

It is true that you can use the cash value of permanent policy for any purpose, plus it has interesting feature, such as tax-free withdrawals and loans. But remember, you have to be careful when using the cash value. If you run out of money due to "too much taking money" and you suffered loss on your policy , your withdrawals will be taxable.