😰 Ankit Thought He Was Smart… Until His Family’s Claim Got Rejected
Ankit, 29, bought the cheapest term plan online. No riders, no questions asked.
He thought:
“It’s just insurance. Why overthink it?”
But when he passed away in an accident, the insurer rejected the claim.
Turns out, Ankit had asthma — and never disclosed it.
A painful reminder: term insurance only works when done right.
Here are the top 5 mistakes most people make — and how you can avoid every single one.
❌ Mistake #1: Buying Less Cover Than Needed
This is the most common mistake: “₹50L should be enough, right?”
Wrong.
💡 Reality Check:
- Your family needs to replace your entire income for decades
- Add rising costs, EMIs, kids’ school fees, inflation
Rule of thumb:
🔢 20x to 25x your annual income
🧮 Example:
- Income: ₹10 lakh/year
- Ideal cover: ₹2 Cr
- Buy only ₹50L? In 2045, that might be worth just ₹20L in today’s money
🛑 Underinsuring is almost as bad as no insurance at all.
❌ Mistake #2: Choosing the Cheapest Policy Without Checking Claim History
Let’s be real.
We all love a good deal — but not at the cost of claim rejection when your family needs the money most.
🚦 Latest Claim Settlement Ratios (2023–24):
| Insurance Company | CSR (%) |
|---|---|
| HDFC Life | 99.97% |
| Axis Max Life | 99.79% |
| Kotak Mahindra Life | 99.65% |
| ICICI Prudential Life | 99.17% |
| Tata AIA | 99.13% |
| LIC | 98.15% |
| SBI Life | 98.10% |
📌 CSR = Trust Score.
Always go for 98%+ CSR + solid customer service.
🤔 Think about it:
Would you buy a parachute just because it’s cheap… or because it opens when it’s supposed to?
❌ Mistake #3: Hiding Medical History or Smoking Habits
We get it.
You want lower premiums.
But guess what — lying on your proposal form is a claim killer.
🧠 Myth vs Fact
| Myth | Fact |
|---|---|
| “They won’t know if I don’t declare my asthma” | Hospitals share reports. Claims teams investigate. |
| “I smoke socially — doesn’t count.” | Even occasional nicotine = smoker category. |
| “They don’t check at the time of buying.” | They check at the time of claiming. |
🎯 Your honesty now = your family’s protection later.
❌ Mistake #4: Skipping Riders Like Critical Illness or Accidental Death
You might think:
“Why pay extra for riders? I’ll deal with that later.”
But those “extras” can save your future.
🔧 Top Riders to Consider:
- Accidental Death Benefit – Adds extra payout in case of accidental death
- Critical Illness – Pays lump sum if diagnosed with diseases like cancer or heart attack
- Waiver of Premium – Waives future payments if you become disabled or critically ill
💡 Pro Tip:
Riders usually cost ₹100–₹300/month — way cheaper than hospital bills or lost income.
❌ Mistake #5: Not Updating Your Policy After Life Events
You bought a ₹1 Cr policy at 25.
Now you’re married, have a kid, a home loan, and a car EMI.
But your term plan is still the same.
🎯 When to Review Your Term Plan:
- 👰 Marriage
- 👶 Childbirth
- 💼 Big salary hike
- 🏠 Home/car loan
- 👨👩👧 Change in dependents
✅ Quick Checklist:
- Updated nominee?
- Enough cover for your new salary?
- Considered adding riders?
- Reviewed policy every 2–3 years?
📌 Think of term insurance like your wardrobe — it needs updates as your life changes.
📦 What to Check Before You Click “Buy”
Here’s your final safety checklist before buying that term plan:
| ✅ Check This | Why It Matters |
|---|---|
| Coverage = 20–25x income | Covers expenses, inflation, future life |
| Claim Settlement Ratio > 98% | Improves claim success for family |
| Riders added (CI, ADB, WOP) | Gives full coverage at low cost |
| Full health + lifestyle disclosure | Prevents rejection at claim time |
| Updated nominee | Avoids legal mess later |
| Review plan after life milestones | Keeps protection current |
🧠 Bonus: Term Insurance Myths That Still Mislead People
| Myth | Truth |
|---|---|
| “My company insurance is enough” | It ends when you leave the job. Get personal cover. |
| “I’m young, I’ll buy later” | Premiums double every 5 years. Start early, pay less. |
| “I don’t need ₹1 Cr” | Inflation says otherwise. That’ll be worth less in 15–20 years. |
🚀 Final Word: Buy Smart, Not Just Cheap
Term insurance is the most important ₹400/month decision you’ll ever make.
🛡️ It’s not for you.
It’s for your parents. Your partner. Your child.
The ones who’ll depend on your income — even when you’re gone.
✅ Don’t under-cover.
✅ Don’t lie.
✅ Don’t buy without checking.
Buy smart. Protect real. Sleep well.
