Common mistakes when buying life insurance include choosing cover from the premium alone, overlooking household obligations, giving incomplete application details and accepting benefits without reading their conditions. Start with the financial gap your death would leave, then check whether the policy’s cover, duration and payment commitment address that gap.
Why should you define the purpose before selecting a policy?
A policy should match a clearly stated need, such as replacing income for dependents or helping them repay a loan. Choosing solely for a maturity amount or possible tax benefit can leave the protection need unresolved. Write down what the family needs before deciding which benefits matter to you. For example, a parent may need money for living costs and education, while a borrower may also need debt protection.
Check the death benefit separately from any survival benefit. Life Policies differ in their benefit design. A familiar label does not tell you everything about the contract.
How can choosing too little life cover affect your family?
Insufficient cover can leave dependents meeting recurring expenses or outstanding debts from other resources. Assess household spending, the remaining support period, Loans, and future commitments together. Deduct only resources genuinely available for those needs. An income multiple is a starting prompt, not a complete assessment of your family’s circumstances.
Prepare a worksheet for living expenses, education commitments, and debt repayment. Account for inflation when estimating future costs, and avoid subtracting a home the family needs to live in as though it were immediately available cash. A qualified adviser can help assess assumptions rather than treating one formula as universally suitable.
Keep employer-provided cover visible in your worksheet, but check when it ends and whether continuation is available. This prevents a change in employment from exposing a protection gap that your household had not anticipated.
Why is the lowest quoted premium an incomplete buying guide?
The lowest quote is useful only when you understand the cover and conditions behind it. Check the sum assured, duration, payment schedule, benefit options, and exclusions before judging affordability. A premium you can sustain matters because missed payments can affect policy benefits under the contract’s payment and discontinuance provisions. Ask for the total payable amount and compare it with your budget during a possible income interruption. Understand how long premiums are due.
The premium payment term and policy term serve different purposes, so finishing premium payments does not necessarily mean cover ends at that point. Treat an initial quote as provisional until the insurer completes its assessment. Age, health, and other underwriting information can affect acceptance and final terms. Do not assume that every policy fixes every charge for life. Confirm the contract before paying.
What should you check about the duration and payout?
Choose a cover period that reflects how long the relevant responsibilities may continue. A policy ending before those needs end can leave a gap. Also understand who receives the benefit and whether payment is a lump sum or another permitted option. Read the conditions instead of relying on a verbal description. If a child may remain financially dependent beyond your planned retirement date, examine that need explicitly.
If a payout is spread over time, consider whether the family could still meet an immediate debt obligation. Check whether payout choices can be changed and when those choices must be made.
Why must you check every answer in the proposal form?
Incomplete health, tobacco, alcohol, occupation, income, or existing Insurance answers can create underwriting and claim disputes. Answer the questions accurately, review the completed form yourself, and retain a copy. If someone helps complete it, that assistance does not remove the need to check what is submitted in your name.
Disclose information the form requests even when a condition is controlled, or you believe it is minor. If a question is unclear, ask the insurer for written clarification. Do not sign an incomplete form or allow an answer to be changed without checking it. Section 45 of the Insurance Act 1938 sets limits on questioning a Life Policy.
Its three-year period is measured from issuance, commencement of risk, revival, or the date of a rider, whichever is later. This legal protection does not replace accurate disclosure or make every claim payable regardless of contract terms.
Related guide: what to check in your life insurance proposal form
Which documents and benefit conditions should you read?
Read the policy wording, policy schedule, Customer Information Sheet, and applicable benefit illustration. Check the death benefit, exclusions, payment obligations, and what happens if you stop paying. Optional additional benefits should address a specific need. Their availability, eligibility, and claim triggers depend on their own terms.
The Customer Information Sheet helps you identify key terms, but it does not replace the complete contract. Ask which illustrated amounts are contractual and which depend on conditions or future declarations. A projection should never be treated as a promise simply because it appears in a sales discussion. For any additional benefit, check definitions, exclusions, waiting or survival periods where applicable, benefit limits, and when cover ends. Avoid assuming that all diagnoses or disabilities qualify. Keep the relevant documents with your main policy so the family can locate them.
Why should you look beyond a claim settlement ratio?
A claim settlement ratio describes reported claims experience for a defined period. It does not establish that your individual claim will be accepted. Read the statistics’ definition and reporting period alongside service information, claim requirements, and policy terms. Avoid treating an arbitrary percentage as proof of reliable outcomes for every customer.
If using published data, identify whether it measures claim numbers or claim amounts and whether it concerns individual or group business. Ask how to contact the claims team and where to raise a complaint. Clear servicing information is useful to the family as well as to the buyer.
What should you do after receiving the policy?
Check the issued policy against your application and the terms you accepted. Confirm the insured person, cover, duration, premium schedule, and nominee details. Applicable Life Policies have a 30-day free-look period from receipt of the policy document, whether electronic or physical; policies with tenure below one year are excepted.
Raise discrepancies promptly and retain evidence of the receipt date. If you choose free-look cancellation, submit the request through the insurer’s stated process before the period expires. A refund may have permitted deductions, including proportionate risk premium, medical examination expenses, and stamp duty. Check the applicable rules and terms.
Share the policy location and claim contact with your nominee. Set payment reminders and review your cover after changes such as a new dependent, Loan, or employment move. Do not cancel existing protection merely because a new application has been submitted. First confirm that replacement cover is in force.
Related guide: how the life insurance free look period works
How can ABSLI help you check the details?
Aditya Birla Sun Life Insurance provides official policy documents, servicing information, and claim-related resources through its website. Use those materials to clarify the terms of a policy you are considering or already hold. Ask for written explanations of anything unclear before deciding, and retain the final documents and payment receipts.
Useful resource: questions to ask before buying life insurance
October 12, 2026
5 mins read
Table of Contents
BUY ONLINE
