The Biggest Mistakes People Make With Life Insurance

You’re comparing quotes, scanning reviews, and trying to pick a policy that protects the people you love. I’m a licensed life insurance agent, and I see the same avoidable mistakes every week. Fix these up front and you’ll get stronger coverage, cleaner paperwork, and a price that actually makes sense.

1. Shopping by teaser price only

Many online quotes assume the top health class. Real offers land after underwriting looks at build, blood pressure, cholesterol, prescriptions, nicotine or vaping, family history, driving, and hobbies. The first low number can drift.

Better move: spend five minutes on a quick pre-screen with an agent who will match your profile to carriers that like it. Ask, “What class did you use for this quote, and what class do you expect for me?”

2. Picking the wrong term length

A 20-year term looks cheap today, then year 21 arrives with a huge renewal rate. Term length should match your timeline: mortgage payoff date, youngest child’s age plus school years, years to retirement.

Fix: choose a term that reaches the finish lines that matter. If your mortgage ends in 27 years, price 25–30 years, not 20.

3. Buying too little coverage

A round number like $250k feels tidy. It may not cover income, debts, kid costs, and final expenses.

Quick sizing formula:
Coverage = Income Years + Debts + Kids & Care + Final Costs − Savings − Existing Coverage

• Income Years: 10–15× gross income, or 7–10 years of take-home pay
• Debts: mortgage, auto, private student loans, credit cards
• Kids & Care: childcare and a college seed fund
• Final Costs: $15k–$25k for funeral and immediate bills
• Subtract savings and current policies that will stay in force

If the “perfect” number feels heavy, set a monthly budget and buy the most coverage you can keep comfortably.

4. Relying on work coverage as the whole plan

Employer life insurance is a great perk, but it’s tied to your job and often only one or two times salary. Job change or gap = coverage gap.

Fix: keep the work policy as a layer. Add your own policy that follows you everywhere.

5. Forgetting the stay-at-home parent

Try replacing childcare, rides, meal planning, and schedule management overnight. That support has a real price tag.

Fix: add a policy sized to childcare years and household costs. A modest amount can keep the surviving parent from making rushed, costly decisions.

6. Skipping a short exam when it would save real money

No-exam can be fast and convenient. Healthy applicants often earn a stronger class with labs and vitals, which trims the bill for decades.

Fix: ask for side-by-side quotes: no-exam vs. exam, same face amount and term. If the exam saves $10–$20 per month, that’s thousands over the term.

7. Ignoring carrier “sweet spots”

Carriers price risk differently. One favors runners on a statin. Another is friendlier on build. A third treats former nicotine use more leniently after 12–24 months.

Fix: ask for two or three carriers with a one-line reason each: “This one prices your meds well,” “This one is better on BMI,” “This one has the best conversion rules.”

8. Overpaying for riders you won’t use (or skipping the ones that help)

Riders are add-ons. Some deliver. Some just add cost.

Worth a look:

• Living benefits / accelerated death benefit: access part of the death benefit after qualifying chronic, critical, or terminal events. Many policies include a basic version at no charge.
• Waiver of premium: if you meet the policy’s disability definition, the insurer pays your premium. Big help for single-income homes.
• Child rider: low-cost kid coverage with future conversion rights.
• Return of premium (term): higher price now, base premiums back if you outlive the term. Sometimes the math wins, sometimes not—compare both versions.

Fix: get rider costs in dollars per month and a simple one-line scenario. If the value isn’t clear, skip it.

9. Overlooking conversion rules on term

Many term contracts allow a move to permanent coverage during a window with no new medical questions. That option can be a lifesaver after a health change.

Fix: ask for the conversion window, the permanent product menu, and a dollar example for converting a slice of coverage.

10. Naming beneficiaries once and never touching them again

Life changes. Beneficiaries should keep up. Outdated designations create delays and headaches.

Fix: list primary and contingent beneficiaries. Review after big events: marriage, divorce, new baby, new home. Keep a simple claims checklist where your spouse can find it.

11. Paying monthly when annual billing would cut the total

Many carriers add a small “modal load” for monthly or quarterly pay. Annual pay often trims the bill. EFT can narrow the gap if monthly fits your cash flow.

Fix: ask for monthly-EFT vs. annual totals. If annual saves a chunk, plan for it.

12. Not using laddering

One giant 30-year policy is simple. Many families need heavy coverage now and less later.

Fix: split coverage into steps that end as needs drop. Example: $750k for 10 years + $500k for 20 years + $250k for 30 years. Big protection early, leaner cost later.

13. Hiding health details or guessing on the application

Underwriting checks prescription histories, MVR, MIB notes, and sometimes digital health records. Gaps slow your file or lead to declines.

Fix: answer directly and completely. If something looks messy, your agent can aim you at a carrier that reads your profile more favorably.

14. Waiting “until next year”

Every birthday nudges rates up. Health can change without warning. The cost of waiting often exceeds the savings you hoped for.

Fix: pick a budget you can live with, lock in coverage, and upgrade later if income rises.

15. Treating IUL pitches like guaranteed retirement income

Common sales lines: “market upside with no downside” and “tax-free retirement.” Real contracts include caps, participation limits, changing crediting terms, monthly charges, and loan rules. Some people can make IUL work; most families want simpler coverage.

Fix: lead with term for income protection. If lifetime coverage matters, add a small permanent layer with clear guarantees. Keep investing separate in retirement accounts or brokerage.

16. Ignoring face-amount price tiers

Rates per $1,000 often drop at common tiers like $250k, $500k, and $1M. You might jump a tier and gain meaningful protection for a few dollars more.

Fix: ask for the next tier up near your target.

17. Never reviewing the policy

New baby, new house, big raise, debt paid down, better labs, nicotine-free milestones—your plan should reflect the new picture.

Fix: schedule a quick yearly check-in. Ask about reconsideration if health improved, or about conversion if you want a permanent slice.

Three quick scenarios (real-life style)

Young family, new mortgage

• Need: income protection for 25–30 years, mortgage payoff, seed money for two kids
• Plan: $1M 30-year term, price ladder vs. single policy, add child rider
• Tip: compare monthly vs. annual; check the $1M tier vs. $900k

Single renter with a co-signed loan

• Need: cover the co-signed balance, final costs, small gift to parents
• Plan: $500k 20- or 30-year term
• Tip: line up a short exam if labs could boost the class; keep a simple beneficiary setup

Business owner with an SBA loan

• Need: policy to satisfy the lender and protect family income
• Plan: term length that tracks the loan, plus a personal policy sized by the formula
• Tip: keep business and personal coverage on separate contracts for clarity

How I keep this simple (and save you money)

1. Five-minute pre-screen. Goals, budget, height/weight, meds, nicotine or vaping, driving, and any activities carriers care about.
2. Targeted quotes. Multiple carriers that like your profile, not a one-size list. Same specs for a fair comparison.
3. Clear choices. Two term lengths, a ladder option, rider prices in dollars, monthly-EFT vs. annual totals, and the next face-amount tier.
4. Easy e-app. If a short exam trims real dollars, I set it up at home or work.
5. Follow-through and service. You get updates during underwriting, beneficiary help after issue, and quick reviews when life shifts.

You’ll know what you’re buying, why the price looks the way it does, and how to keep the policy in great shape.

A copy-and-paste note that gets you real answers fast

Send this to me (or any agent you’re testing):

• What health class did you use for my quote, and what class do you expect after underwriting?
• Price no-exam vs. exam for the same specs.
• Show two term lengths tied to my mortgage and kids’ ages, plus a ladder option.
• List rider costs in dollars per month with one-line scenarios.
• Send monthly-EFT vs. annual totals.
• What’s my term conversion window and permanent menu?
• If I quit nicotine for 12 months or improve labs, when can we request a new class?
• Share a simple claims checklist my spouse can follow.

Eight questions. Clear answers. Zero guesswork.

Ready for a plan that fits your life?

Send your age, state, coverage goal (income, mortgage, kids, final expenses), a monthly budget range, and any health notes you want me to factor in. I’ll reply with real numbers from several carriers, plain-English trade-offs, and the fastest path to approval.