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The 10 mistakes
- Buying ₹1Cr and feeling safe — on ₹15LPA income you need 2–3× that.
- Mixing insurance with investment — ULIPs/endowments do both jobs badly; term + mutual funds do both well.
- Hiding smoking/health history — the #1 claim rejection reason. Honesty costs a little more premium; dishonesty costs the whole claim.
- No health insurance because 'company covers it' — it vanishes when you quit.
- Buying for tax saving in March — panic-bought endowment plans lock money at 4–5% for decades.
- Ignoring the nominee — outdated nominees (or none) delay payouts for months.
- Too many small policies — five ₹20L policies cost more in total than one ₹1Cr policy.
- Skipping critical illness cover — health insurance pays bills, not lost income.
- No cover for the homemaker — see our women's guide.
- Never reviewing — income doubles but cover stays the same. Review every 2–3 years.
Frequently asked questions
What is the biggest insurance mistake in India?
Under-insurance — buying ₹25–50L cover when the family needs ₹2Cr+. The second biggest is mixing investment with insurance (ULIPs/endowment) instead of term + mutual funds.
Why do insurance claims get rejected?
The top reason is non-disclosure: hidden smoking, alcohol use, or pre-existing conditions. Then come lapsed policies (missed premiums) and exclusions people never read.
How often should I review my insurance?
Every 2–3 years, and after big life events: marriage, children, home loan, job change, or a big salary jump.
Is it bad to have many small policies?
Usually yes — one large term policy is cheaper per lakh of cover than several small ones, and far easier for nominees to manage at claim time.
Watch: Bima Gyan by ViRa
From our YouTube channel Bima Gyan by ViRa — simple Hindi/Hinglish explainers.
Related guides
Insurance is the subject matter of solicitation. Figures on this page are illustrative estimates for education, not quotes — actual premiums depend on insurer underwriting, age, health and plan terms. Read all policy documents carefully before buying.