Introduction
Buying life insurance is one of the smartest financial decisions you can make. But it’s also one that people often get wrong—sometimes with serious consequences for their family’s financial future. Whether you’re shopping for a policy or already have one, avoiding these common life insurance mistakes can save you money, protect your loved ones, and give you peace of mind.
1. Getting Too Little Coverage
Many people underestimate how much their loved ones would need if they passed away. Think beyond funeral costs—consider mortgage payments, childcare, college tuition, and daily living expenses.
Tip: Aim for at least 10–15 times your annual income, or work with a licensed agent to do a proper needs analysis.
2. Choosing the Wrong Type of Policy
There are two main types:
- Term Life Insurance – Affordable and temporary (10–30 years)
- Permanent Life Insurance – Lifetime coverage with cash value
Buying term when you need lifelong protection—or buying permanent without understanding the cost—can lead to gaps in coverage or overpaying.
3. Letting the Policy Lapse
Missing premium payments can cancel your policy. If that happens, you lose your coverage—and in some cases, your investment.
Tip: Set up automatic payments and review your statements annually.
4. Not Adding Riders or Living Benefits
Policy riders like accelerated death benefits, waiver of premium, and child term coverage can be low-cost add-ons that provide high value. Many policyholders skip them without realizing how useful they could be.
5. Forgetting to Update Beneficiaries
Your life changes—so should your beneficiaries. If you forget to update them after a marriage, divorce, or birth, your death benefit may go to someone you no longer intend.
6. Buying Based on Price Alone
Cheap isn’t always better. A low premium might come with trade-offs: less coverage, fewer riders, and stricter policy conditions.
Tip: Compare value, not just price. A slightly higher premium could provide much more protection and flexibility.
7. Failing to Review Your Policy Regularly
Life circumstances change—so should your coverage. Whether you’ve changed jobs, bought a house, or had children, your policy should evolve with your life.
Final Thoughts
Life insurance isn’t something to “set and forget.” By avoiding these common mistakes, you’ll ensure your policy truly protects your loved ones when it matters most.
Need help reviewing your current policy or making the right choice?
Contact our team today for a personalized policy audit or new policy consultation—free of charge.