1. Guessing the amount
Picking a round number like $250,000 feels responsible but is often wrong. A mortgage, children or debts can easily push the real need to a million or more. Use a structured method such as our Life Insurance Needs Calculator so the figure is based on your situation.
2. Relying only on employer cover
Work policies are convenient, but they usually pay one or two times salary and end when you leave the job. If you change careers, are laid off or become ill, your protection may disappear at the worst time. Treat employer cover as a bonus, not the foundation, and own an individual policy as well.
3. Waiting for the perfect moment
Premiums rise every year you age, and a new health condition can raise your price or block approval. Waiting five years on a $500,000 policy can add thousands over the term, as the Cost of Waiting Calculator shows. Buy a smaller policy now if budget is tight and add more later.
4. Hiding or misstating health details
It can be tempting to leave out a smoking habit or a medication, but insurers can investigate during the contestability period, commonly two years, and later if fraud is suspected. A claim can be reduced or denied. Honest answers protect your family and rarely cost as much as people fear.
5. Choosing a term that is too short
A 10-year policy for a 30-year mortgage leaves a gap in the final years. Match the term to your longest obligation, such as the mortgage or the years until your youngest child is independent. If cost is a concern, combine two policies of different lengths.
6. Forgetting to update beneficiaries
Divorces, marriages and births often happen without a change of beneficiary form. Many families have faced a payout to a former spouse or a deceased relative because the paperwork was never updated. Review beneficiaries every few years and check shares with the Beneficiary Share Splitter.
7. Buying a product you do not understand
Complex permanent policies can be valuable, but they also carry fees, surrender charges and assumptions that may not hold. Ask for the guaranteed values in writing, and read about term versus whole life before signing. If you cannot explain a policy in two sentences, keep asking questions.
Bonus step: tell your family
A policy no one knows about can sit unclaimed for years. Keep a copy of the contract, the insurer's contact details and a list of accounts somewhere your family can find them. Share the location with a trusted person.
Quick fix list
- Recalculate your amount today.
- Check what your employer cover really includes.
- Get quotes while you are healthy.
- Answer every question truthfully.
- Match the term to your debts.
- Update beneficiaries after every major life event.
- Keep documents where your family can reach them.
Frequently asked questions
What is the contestability period?
Usually the first two years of a policy, during which the insurer can review the application more closely if a claim occurs.
Can I have more than one policy?
Yes. Many people hold two or three term policies of different lengths. Insurers may ask about existing cover.
How do I find a lost policy?
Check old mail, bank statements and your email, then contact the insurer or your state unclaimed property office.
Keep reading
This guide is educational and is not personal insurance, tax or legal advice.
Edited and checked by Talha Shah. Last reviewed 2026-10-17.