3 Mistakes I Made While Buying Life Insurance… and 3 Things I Did Well

I hadn’t thought seriously about life insurance before I was pregnant with my first baby. As we prepped to become parents, life insurance coverage (and a crib, and nine types of pacifier, and a baby bath shaped like a flower) seemed impossible to manage without. 

It can be hard to predict exactly what your future self will need. Do I have a few baby purchase regrets? Sure I do. (I stand by the flower bath, though.) Is life insurance one of them? No way. But that’s not to say I couldn’t have done a few things even better. Learn from my mistakes, and get a few tips to help you get the most benefit from life insurance.

Life Insurance Mistakes

Looking back on the life insurance application process, there are a few things I wish I’d done differently. Avoid these mistakes to get the smoothest experience possible.

1. Rushing to apply while pregnant

Life insurance coverage can provide an important source of financial relief to loved ones if you pass away. And yes, you can get life insurance coverage while pregnant, and insurers will often schedule a postpartum follow-up to review your health and make sure you’re getting the best available rate.

The thing is, I was so anxious to get coverage, like, yesterday, that fitting in another medical exam when I was already going to weekly appointments was annoying, and I spent more time worrying about disaster “what-if” scenarios than thinking about peace of mind. 

Looking back, I wish I’d applied before getting pregnant so I wouldn’t have to worry about how my changing body might affect my insurance rates. Or, if that wasn’t possible, I wish I’d been gentler on myself, framing my choice as, “it’s easier to apply now and have more time to rest and bond when the baby comes,” instead of stressing over an imaginary deadline.

2. Not choosing the right term length

When I applied, 20 years felt like an enormous stretch of time. The baby we hadn’t even met yet would be out of the house. It seemed like plenty of time to cover our family-raising years. But then we had two more kids.

Now, my youngest will only be 13 when our policy expires. We’ll also only be halfway through the mortgage on our new house. Our choices at this point are to get another policy now, apply for a new policy after our current one expires (we’ll be in our 40s and more expensive to insure) or go without coverage at all through our baby’s teen years. None of these are easy options. We were on the fence about 20 versus 30 years of coverage. In hindsight, I wish we’d gone for the extra time.

Of course, that's why many people do an annual life insurance review to make sure the coverage they've chosen still fits their family's needs.

3. Not comparing quotes

Life insurance premiums are based on a number of factors, including age, health, credit and financial information, and lifestyle risk. Although many insurance companies assess a lot of these factors similarly, there can always be a few points that fall on a borderline. Maybe one insurance company offers a higher weight limit for certain rates. Or a health condition puts you on the line between two rates, so you’d prefer to go with the company offering a more favorable (and cheaper) assessment. 

My husband was managing a minor health condition when we applied, which thankfully turned out to be a temporary issue. Part of me wonders how much it may have factored into our premium, and if it would have made sense for us to get another quote just to make sure. It may or may not have mattered in our case, but it doesn’t hurt to comparison shop if you’ve got time.

How We Got Life Insurance Right

While I might have done a few things differently, there are also some choices that I’m grateful we made.

1. Buying life insurance early

Procrastinating on life insurance is one of the biggest and easiest mistakes to make. It’s so easy to put financial tasks off for “when I have time,” only to find that time keeps filling up with busy schedules. Being proactive about protecting our family made me feel more prepared. I’m glad my life insurance policy has my back and isn’t hanging over my head as an endless to-do.

2. Getting plenty of coverage

The USDA estimates that the cost of raising a child born in 2015 is more than $230,000. I have three. Saying kids are expensive is a major understatement—and this estimate doesn’t even include college.

My family doesn’t live like millionaires, but my husband does have a $1 million policy. It made sense — we hoped to have several children, become homeowners, travel the world and watch our kids graduate college. That high coverage amount can help keep our family’s important plans alive, even if we don’t get to see them. 

It can be easy to underestimate the right level of coverage, especially if you’re used to life insurance plans offered through an employer, which tend to have much lower limits. The best way to calculate your coverage is to add up the cost of debts, future plans and how much you’d like to contribute to regular living expenses. It’s an eye-opening way to see the financial impact you have on your family.

3. Buying coverage as a stay-at-home-mom

Speaking of financial impact, it’s important to emphasize that salary isn’t the only way to bring real value to your family. When my husband and I applied, I was struggling through my first year as a freelance writer. Although I was working on building a new career, some months I didn’t have any assignments at all. My income was too low and too unreliable to factor into our regular household budget.

So I applied for life insurance as a stay-at-home mom. The insurance company took into account the value of my role in providing childcare and doing household work that my husband would otherwise have to pay for. All told, I was approved for coverage at 50 percent of his policy value.

Over the years, my career has grown, plus I still handle an important share of the work of keeping our house running. I’m glad my policy reflects the different kinds of value I provide.

The Biggest Life Insurance Mistake

While there are a few tweaks that could have made my life insurance work better for me, the point is having a policy in place. The biggest life insurance mistake to avoid is waiting too long to get coverage. Even if I didn’t do everything perfectly, I still ended up with a policy that offers meaningful protection during the years when we need it most.

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