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Term life insurance mistakes to avoid


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Due to its inexpensive cost and flexible time frames, term life insurance is a popular choice for many people.

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Life insurance is one of the most important financial protections you can buy. 

In exchange for a monthly fee to a provider you can protect your loved ones with a lump sum of money in the event of your death. Depending on the policy type, you may also be able to tap into your account as a cash alternative to use while alive.

Life insurance that lasts for the duration of the policyholder’s life (and comes with the cash reserve) is known as whole life insurance. Term life insurance, meanwhile, does not allow the insured to access any funds. It’s also limited to a certain time frame of the policyholder’s life (hence the name “term”). 

Due to its inexpensive cost and flexible time frames, term life insurance is a popular choice for many people. But just like many other financial products and services, it’s important to fully understand the pros and cons of this insurance type in order to fully benefit.

If you’re in the market for term life insurance then start by getting a free price quote so you know exactly what it will cost.

Term life insurance mistakes to avoid

Considering getting a term life insurance policy? In order to secure the best and least expensive plan you’ll want to avoid making these mistakes:

Waiting to apply

Life insurance favors the young and healthy. The younger you are the more likely you are to put yourself in the running for favorable rates. So don’t wait to apply and assume that costs won’t be affected – they will be. Sometimes it makes sense to save up and delay purchases for when you have a little more money in your wallet. That’s not the case with life insurance.

As you age and your health deteriorates you’ll be considered riskier to insure. That risk (assuming you’re approved for coverage) will be reflected in higher premiums. But if you act now when you’re as young as you ever will be you’re more likely to secure a low rate.

Not sure what a policy would cost? You can get a free price estimate now.

Getting a policy for too short a time frame

Term life insurance is known for its flexibility and for being easy to use. Because of this, some applicants may underestimate how long they need coverage. This can become problematic as term life insurance policies tend to be more expensive to renew than they initially cost. So it’s important to get the time frame right, even if it winds up being slightly longer than needed. 

To successfully do this it helps to complete a realistic appraisal of what you need life insurance for. Is it to pay off your mortgage in your absence? Then you’ll need to get a policy for at least as many years as you have left to pay your lender. Or is it to help pay for college for your children? Then you’ll want a policy robust enough to do just that. 

Know exactly what you want your policy to accomplish and then pick a term that can help you do it. 

Not getting enough coverage

Because the cost of term life insurance policies is often reasonable, some applicants may be happy with smaller coverage amounts. But that’s faulty thinking. Costs for term life insurance are lower because of the policy structure itself, not because you chose $250,000 in coverage instead of $300,000. 

In fact, you may be surprised to see how little of a difference the ultimate cost is to you. You could wind up getting a policy for $1 million or more and still pay less than $100 a month. 

Yes, the more coverage you have the more you’ll pay but when it comes to term life insurance the price differential between amounts may be negligible. Explore your options, plug in a few different amounts and start comparing quotes

The bottom line

Term life insurance is a cost-effective and valuable policy for millions of adults. But, like most financial products and services, there are pitfalls to avoid. So if you want an inexpensive policy don’t wait to apply and make sure to get coverage for as long as you will actually need it. Finally, don’t be misled by the price tag – you may be able to get significant sums of coverage for a minimal cost. Use the table below to compare some top providers now.



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