Top 5 Mistakes to Avoid While Buying Term Insurance Online

Buying term insurance online has made life simpler. With just a few clicks, you can compare plans, calculate premiums, and make a purchase from the comfort of your home. But while it’s convenient, it’s also easy to make mistakes that could impact your family’s financial security in the future.

Let’s walk you through the top 5 mistakes to avoid when buying term insurance online — and how you can make a smart, informed choice.

1. Not Assessing Your Coverage Needs Properly

Many people either guess their coverage amount or go with a round figure like ₹50 lakh or ₹1 crore. But the truth is — your insurance should be based on your personal financial responsibilities.

To estimate correctly, consider:

• Your current annual income
• Outstanding loans and EMIs
• Future goals like your child’s education or spouse’s retirement
• Monthly household expenses and inflation

A helpful rule is to opt for a coverage amount that’s 10–15 times your annual income. Better yet, use a term insurance calculator to get a more accurate picture based on your needs.

2. Ignoring the Policy’s Terms and Conditions

Many buyers scroll past the fine print or skip reading the policy brochure altogether. But understanding what you’re signing up for is crucial.

Pay close attention to:

• Exclusions like suicide clauses or deaths under specific conditions
• Waiting periods
• Claim procedures and documentation requirements
• Policy lapse rules if you miss premiums

Overlooking these details can lead to surprises later — especially during claim settlement.

3. Focusing Only on Premium Costs

It's natural to want the lowest premium. But a cheaper policy isn’t always better.

Low premiums can mean:

• Lower coverage
• Fewer benefits and riders
• Limited flexibility
• An insurer with poor claim support

Look beyond cost. Prioritise features, reliability, and how well the plan fits your life stage and goals.

4. Not Disclosing Accurate Health Information

One of the most common and risky mistakes is hiding health conditions to get a lower premium. While it may seem harmless at first, it can have serious consequences later.

If your insurer finds discrepancies during claim investigation, they may reject the claim. That’s the last thing your loved ones need.

Always be honest about:

• Pre-existing conditions
• Medical history
• Lifestyle habits like smoking or alcohol consumption
• Hospitalisation records

Full disclosure ensures fair premiums and hassle-free claims.

5. Overlooking the Insurer’s Claim Settlement Ratio

The claim settlement ratio (CSR) tells you how many claims an insurer settles successfully. A low CSR could mean trouble during claim processing.

Always check:

• The insurer’s CSR for the last few years
• Their reputation for customer service
• Reviews from policyholders

Choosing an insurer with a consistently high CSR means your family is more likely to receive the support they need, when they need it most.

How to Avoid These Mistakes and Choose the Right Term Insurance Plan

Here are a few simple tips to get it right:

• Use a term insurance calculator to determine ideal coverage
• Compare plans from different insurers — not just the premiums, but also benefits and service ratings
• Choose a plan with flexible options (like riders or increasing cover)
• Read the policy document carefully
• Check claim settlement history and user reviews

If you're still unsure, speak with an advisor or explore plans from trusted insurers known for transparent processes and customer-first service.

Conclusion

Buying term insurance online is a smart and efficient way to secure your family’s future — but only when you make the right choices. By avoiding these common mistakes, you ensure that your policy truly delivers when it matters most.

Ready to take the next step?

Use Bandhan Life’s Term Insurance Calculator to find your ideal coverage or Explore Our Term Plans today.

Frequently Asked Questions

How do I calculate how much term insurance coverage I need?

You can multiply your annual income by 10–15 and add your liabilities. Or, use a term insurance calculator for a tailored estimate.

Can I change my policy terms after purchasing term insurance online?

Some terms like coverage enhancement or rider additions may be updated, but not all features are changeable. It’s best to confirm with your insurer.

What happens if I make a mistake in my health declaration?

Incorrect health declarations may result in claim rejection. Always provide complete and honest information when applying.

How do I compare term insurance policies online?

Look beyond just premium costs. Compare coverage benefits, claim settlement ratios, features, and user feedback before making a choice.