Buying your first term insurance policy is one of the smartest financial decisions you’ll ever make - but
it’s also where most people slip up.
From choosing the wrong sum assured to skipping medical tests or
relying on employer cover, even small mistakes can have big consequences later.
The good news? Every mistake is avoidable - if you know what to watch for.
This guide breaks down the 10 most common term insurance mistakes and shows you exactly
how to buy the
right plan confidently in Hyderabad,
Telangana.
Mistake #1 - Buying Too Little Cover
Problem: Many buyers choose ₹25-₹50L because it sounds big.
Fix: Calculate coverage as 15× annual income + loans + dependents’ future
needs.
Mistake #2 - Focusing Only On Premium, Not Claim Ratio
Problem: Cheapest plan ≠ Best plan.
Fix: Check Claim Settlement Ratio (CSR) above 95% for reliability.
Mistake #3 - Hiding Medical Or Lifestyle Details
Problem: Non-disclosure increases claim rejection risk.
Fix: Always declare health history, smoking, alcohol, and medication honestly.
Mistake #4 - Relying Only On Employer Cover
Problem: Job cover ends when you switch or retire.
Fix: Buy an individual policy that stays with you for life.
Mistake #5 - Choosing Wrong Policy Term
Problem: Coverage expires before financial obligations end.
Fix: Select a term that covers you till retirement + 5-10 years.
Mistake #6 - Ignoring Riders
Problem: Missing riders results in incomplete protection.
Fix: Add Critical Illness, Accidental Death, and Waiver of Premium
Riders.
Mistake #7 - Buying Without Medical Test
Problem: No-medical plans have higher rejection risks.
Fix: Always take full medical underwriting.
Mistake #8 - Forgetting To Update Nominee Details
Problem: Outdated nominee causes claim delays.
Fix: Update nominee info after every life event.
Mistake #9 - Ignoring Rider And Payment Flexibility
Problem: Wrong payment mode or missed add-ons.
Fix: Pay annually and review riders at each renewal.
Mistake #10 - Buying From Unverified Sources
Problem: Unregistered agents or unofficial links.
Fix: Buy only from IRDAI-approved platforms like PolicyBachat.
Bonus Mistake - Not Reassessing Cover Every Few Years
Life changes - so should your insurance. Review coverage every 5 years or after major
life events.
Local Insights For Hyderabad
- Avg. under-insurance gap: ₹12L.
- Top reason for wrong cover: Focus on lowest premium.
- % of buyers skipping medicals: 27%.
- Most trusted insurers locally: HDFC Life, Max Life, ICICI Prudential.
Smart Buyer Checklist
- [ ] Calculate ideal cover (15× income + loans).
- [ ] Take medical test.
- [ ] Choose term till at least age 60-65.
- [ ] Compare CSR above 95%.
- [ ] Add riders (CI + ADB + WOP).
- [ ] Verify insurer registration and IRDAI code.
- [ ] Update nominee every 2-3 years.
- [ ] Use auto-pay to avoid lapse.
Why Trust PolicyBachat
- Compare 20 + top insurers instantly.
- Verified claim ratios and transparent pricing.
- Free Claim Assist service for nominees.
- Multilingual support across India.
- Paperless purchase and instant policy copy.
FAQs
What’s the most common mistake in term insurance?
Choosing too little coverage and not disclosing health facts.
Is it okay to skip riders to save money?
No, they add essential protection for a small cost.
Can I increase my coverage later?
Yes, through life-stage upgrades or new policies.
Why shouldn’t I skip medical tests?
Full medicals ensure faster and dispute-free claims.
How do I know if an insurer is trustworthy?
Check Claim Settlement Ratio (CSR) and IRDAI registration.
Are online term plans safe?
Yes, fully safe and legally valid.
Can homemakers get coverage?
Yes, via spouse-linked or joint term plans.
How do I calculate ideal cover?
Use PolicyBachat’s Term Insurance Calculator.
What if I buy from multiple insurers?
Completely allowed - just disclose all existing policies.
Does PolicyBachat help with claims?
Yes, through the Claim Assist Desk for fast, transparent processing.
Customer Reviews
- “I made half these mistakes before reading this!” - Ankit Verma, Delhi
- “Loved how it listed common errors clearly.” - Meera Joshi, Pune
- “Now I understand why medicals matter so much.” - Arun Menon, Kochi
- “Perfect checklist for first-time buyers.” - Ravi Krishnan, Chennai
- “PolicyBachat made comparison easy and transparent.” - Nisha Patel,
Bengaluru
- “Wish I read this before my first policy!” - Vikram Desai, Mumbai
Featured