Buying life insurance is a long-term financial decision. Small mistakes at the beginning can create problems later, particularly when a family needs to make a claim.
1. Buying Too Little Cover
Do not select cover only because the premium looks affordable. Consider the family’s financial obligations and dependents.
2. Hiding Relevant Information
Application forms should be completed accurately. Important information about health, occupation, lifestyle or other requested facts should not be concealed.
3. Choosing Only for Tax Benefits
Tax treatment is only one part of a policy’s economics. First understand the insurance need and product structure.
4. Ignoring Exclusions
Read exclusions and claim conditions instead of assuming every situation is covered.
5. Forgetting the Nominee
Register nomination and review it after major family changes.
6. Missing Premium Payments
Understand the policy’s grace period and consequences of non-payment. IRDAI’s current life-product framework specifies grace-period provisions that vary by premium frequency. citeturn0search7
7. Not Reading the Free-Look Terms
IRDAI’s 2024 framework provides a 30-day free-look period for applicable life-insurance policies from receipt of the policy document, subject to the regulations and product conditions. citeturn0search7
8. Ignoring Charges
For savings or market-linked products, understand all applicable charges and how they affect value.
9. Not Updating Contact Details
Keep mobile number, email, address and bank details current with the insurer.
10. Not Telling the Family
A policy is useful only if the people who may need to claim can locate the records.
Important: Life-insurance rules, tax treatment, policy terms and product features can change. Readers should check the policy document and official regulator/tax guidance before making a financial decision.
Read more personal-finance guidance at NewsNationOnline Personal Finance.
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