Common Mistakes People Make Buying Life Insurance

1. Guessing at the amount

"Round number that felt big" isn't a coverage plan. Too little leaves a gap; too much means paying for coverage no one needs. Run an actual number. Add up debts, income to replace, the mortgage, and future education, then subtract what you've already saved. A real figure beats a gut guess.

2. Picking a term that's too short

A 10-year term is cheaper, and that low price is what pulls people in. If your mortgage has 22 years left and your kids are in grade school, a 10-year policy expires right in the middle of the need, and renewing later, older, costs much more. Match the term to the length of the obligation, not to the lowest premium.

3. Counting only on coverage from work

Employer life insurance is a nice perk, but it's usually modest (often one or two times salary) and it's not portable. Leave the job and it typically doesn't come with you. Treat it as a bonus on top of your own policy, not the plan.

4. Forgetting the beneficiary

The beneficiary designation is what actually directs the money, and it's the thing people set once and never touch. An ex-spouse still listed, a child who's now an adult, "my estate" written in where a person should be: these cause real problems at the worst time. The part most people get wrong: the beneficiary form beats your will, so updating the will after a divorce does nothing if the form still names your ex. The insurer pays whoever's on the form, full stop. Name primary and backup beneficiaries, and review after every big life change.

5. Waiting

This is the most expensive mistake because it compounds. Rates rise with age, and when you buy, you lock in your price for the whole term. Putting it off a few years to "get to it" usually means paying more for the same coverage, permanently. If you have a clear need now, waiting rarely makes it cheaper.

6. Shading the truth on the application

Leaving off the smoking, or a condition, to get a lower rate can backfire badly. If the insurer finds a material misstatement, it can contest or deny the claim, exactly when your family is counting on it. Answer honestly; a slightly higher premium beats a denied payout.

7. Buying complexity you don't understand

If you can't explain how a policy works back to the person who sold it to you, slow down. Plenty of people end up in expensive permanent policies for a need that term would have covered for far less. Make sure the product matches the need before you sign.

Before you buy: a quick gut check

1. Did I calculate the amount, not guess it?
2. Does the term outlast my mortgage and my kids' dependence?
3. Is this in addition to work coverage, not instead of it?
4. Are my beneficiaries named and current?
5. Did I answer every health question truthfully?

FAQ

Related: How Much Life Insurance Do You Need? · How to Name (and Update) a Life Insurance Beneficiary · Before You Buy Life Insurance: A Checklist

This article is for general educational purposes only and is not insurance, tax, or legal advice. Cove does not sell insurance and is not affiliated with any insurer. Any figures are illustrative and vary by policy, carrier, and state. Confirm specifics with your carrier and a qualified tax or legal professional. Last updated June 2026.