Buying life insurance feels like a one-time decision, which is exactly why people get it wrong. These are the most common and most expensive mistakes.
1. Buying too little coverage
The most common mistake by far. Many people buy whatever their employer offers — often just one or two times their salary — and assume they are covered. For a family with a mortgage and children, that is rarely enough.
2. Relying only on employer coverage
Group life through your job ends when the job does. It is rarely portable, the coverage is usually thin, and you lose it exactly when a layoff might leave you scrambling. Always have an individual policy as your foundation.
3. Naming the wrong beneficiary
- Naming a minor child directly (creates legal complications)
- Forgetting to update after divorce — an ex can legally keep the payout
- Naming your estate, which can trigger probate and taxes
- Not naming a contingent beneficiary
4. Waiting too long
Every year you delay raises your premium and risks a health change that makes coverage more expensive — or impossible to get at all.
5. Lying on the application
Omitting smoking, health conditions, or risky hobbies can void the entire policy. If the insurer discovers a material misrepresentation during the contestability period, they can deny the claim entirely.
If you fix only one thing, fix your coverage amount. Underinsuring is the mistake that hurts families most.
6. Not reviewing the policy
Life changes — marriage, kids, a new mortgage, a raise. A policy bought a decade ago for a single person rarely fits a family today. Review every three to five years.
Start by calculating your real coverage need with our life insurance calculator, then check that your beneficiaries and amounts still match your life today.