Top 10 Insurance Mistakes Indians Make (And How to Fix Them)

After 31 years of advising families in Gorakhpur, I have seen the same insurance mistakes repeated. Here are the top 10 and how to fix each one.

## Mistake 1: Buying Insurance Only for Tax Saving

"Sir, March aa gaya — koi policy lo." This is the worst reason to buy insurance. Tax saving should be a side benefit, not the main goal.

**Fix:** Decide your insurance need first, then check if it also saves tax.

## Mistake 2: Underinsuring — Too Little Cover

A father of 3 with Rs 6 lakh/year income buys a Rs 2 lakh endowment plan. His family needs Rs 50-60 lakh. His plan covers barely 4%.

**Fix:** Life cover = minimum 10x annual income.

## Mistake 3: No Nominee or Wrong Nominee

Many policies show deceased parents as nominees. When the policyholder dies, the claim gets stuck for months.

**Fix:** Update nominee on every policy today via the LIC portal.

## Mistake 4: Hiding Pre-Existing Conditions

"Arey, BP hai toh kya — agent ne bola mat batao." This is fraud. LIC investigates at claim time and rejects if undisclosed.

**Fix:** Always disclose all health conditions honestly.

## Mistake 5: Surrendering Too Early

A 7-year-old endowment policy surrendered for Rs 1.8 lakh. If kept 13 more years: Rs 12 lakh. Short-term thinking destroyed long-term value.

**Fix:** Before surrendering, explore policy loan or paid-up options. Call 9415313434.

## Mistake 6: Not Buying Term Insurance

"Main to savings wali policy lunga." Term insurance provides the highest cover at lowest cost.

**Fix:** Every earning adult needs a term plan. Savings plans come on top.

## Mistake 7: Too Many Small Policies

10 policies of Rs 2 lakh each = Rs 20 lakh. One term of Rs 50 lakh = same cover at lower total premium.

**Fix:** Consolidate. Fewer, better policies.

## Mistake 8: Not Updating Nominee After Spouse's Death

Original nominee was the spouse who passed away. No one updated. Claim goes to court.

**Fix:** Review nominees after every major life event.

## Mistake 9: Losing Policy Documents

"Policy toh thi, malum nahi kahan hai." At claim time, original document is needed.

**Fix:** Store original in a fireproof folder. Keep digital copy in Google Drive.

## Mistake 10: Not Using a Good Advisor

People try to save agent commission by buying online — then buy wrong products. A good LIC advisor costs you nothing extra (LIC premium is fixed).

Call Ajay Kumar Poddar at 9415313434 — 31 years of honest guidance.