A Terrible Life Insurance Mistake That Cost Me A Fortune

In late 2022, my wife and I were finally able to lock in matching 20-year term life insurance policies at an affordable rate through Policygenius. For five years prior, I had been concerned that I wouldn’t be able to get approved at a reasonable price—all because of a mistake I made by visiting an overzealous sleep center.

Back in 2016, I was tired of paying $1,800 a month for a health insurance plan with UnitedHealthcare and never using it. I hadn’t seen a doctor in years, so when a new sleep center opened up nearby, I figured I might as well get checked for snoring and put my insurance to use.

Of course, one check turned into a full battery of tests, costing my insurance company about $3,800. At first, I felt good—I was finally getting something for all those insurance premiums! But little did I know, that visit would come back to haunt me. The unfortunate consequence of going to the doctor was being flagged with a “sleep-related” issue, such as sleep apnea, which made it much harder to qualify for affordable life insurance later.

When I tried to renew my 10-year term life policy through USAA in 2017 at age 40, they quoted me $450/month—up from the original $40/month. A ridiculous 11X higher! No thanks. I’ll look elsewhere.

My First Two Life Insurance Mistakes

My first real life insurance mistake was going to a doctor before renewing my policy. Had I kept a clean medical record—aside from routine physicals—my new policy would have cost closer to $120/month now that I was 10 years older. Always lock down an affordable life insurance policy before seeing the doctor for anything out of the usual.

But frankly, the first mistake was only getting a 10-year term policy at age 36. I should have gone for a 30-year term at around age 30. After 30, life tends to get much more complicated with housing and family.

Just a year later, I took out another $1+ million mortgage to buy a fixer-upper. Three years later, my son was born. When you have children and debt, life insurance becomes a priority. A 30-year policy back then would’ve cost me about $30/month—an absolute bargain in hindsight.

At least I managed to course-correct by securing a new 20-year, $750,000 term policy through Policygenius for $110/month in 2023. They matched us with SBLI, a carrier willing to underwrite both me and my wife, even with my prior sleep center visit.

But then I made another mistake—by far the worst one yet. It sickens me to write this, but as always on Financial Samurai, I share both the wins and the painful losses to try and help as many people as possible.

The Worst Life Insurance Mistake Possible

My wife recently asked me to send her our rental insurance policy from USAA because Wells Fargo, which holds our remaining rental property mortgage, needed proof of coverage.

When I logged into my USAA dashboard, something odd caught my eye:

“Level Term Series V Policy – $1,000,000 for 10 years.”

It looked like my old term life policy, so I clicked in. And then—WHAM.

The number that jumped out? $885.79/month.

What the hell? What was this doing here? Was this an advertisement or what?

Nobody in their right mind would pay nearly $900 a month for just a $1 million term policy—unless they were terminally ill and had no other options. I certainly wouldn’t.

But dread began creeping in. What if I had been paying this all along?

I quickly logged into my Citi bank account, where USAA autopays are debited, to investigate.

Unnoticed Payment For Two Years

Here’s what I discovered when I logged into my bank and searched for USAA. And let me tell you, it wasn’t good.

To my horror, I had been paying over $800/month to USAA for at least 18 months straight. That’s as far back as my bank’s custom search would let me go.

My stomach sank. How could I be so careless?

Back in late 2022, I thought I told USAA I wasn’t willing to renew my 10-year term life policy when they quoted me ~$450/month—a drastic jump from my original $40/month rate.

So why, without my consent, why did they charge me even more?

Since my original 10-year term policy with USAA expired in January 2023, I’ve paid over $20,000 in premiums to USAA despite thinking my policy had ended!

My whole point of getting a new 20-year, $750,000 term-life insurance policy through PolicyGenius in 2022 was so that I wouldn’t have to pay the new $450/month rate USAA quoted me back in 2017. Oh my.

How Could I Have Missed Overpaying for So Long?

I’ve asked myself this question more than a dozen times. Here are five reasons:

1. Bundled coverage: USAA handles multiple insurance lines for me—rental properties, auto, umbrella, valuable personal property—so when an $800+ charge hit, I didn’t think much of it.
2. Inconsistent billing cycles with auto-debiting: USAA bills me monthly, semi-annually, and annually across different policies. Whenever I saw a large charge, I assumed it was for a quarterly umbrella renewal or something similar.
3. Bad timing: Sometimes I didn’t see the charge at all. If I didn’t log into my bank that week, the transaction got buried by the time I checked.
4. Blind trust: I trusted USAA to do the right thing. It never crossed my mind that they’d continue my 10-year term life policy and charge me 18X more per month than I’d been paying. I’ve been a loyal customer for 23 years.
5. Cash flow cushion: I’m fortunate to have strong savings habits and solid cash flow. The $740–$885 monthly charge for over two years didn’t impact my spending behavior. I save first, spend later—but the downside is being less watchful with expenses.

Despite all this, I take responsibility. No one forced me to set up auto-debit. I should’ve been more diligent about reviewing my finances regularly.

Don’t Expect Your Insurance Carrier to Voluntarily Save You Money

Since 2020, I’ve had multiple conversations with my insurance provider about property, auto, and life coverage. Not once did a representative flag my life insurance policy or ask, “Whoa—are you sure you want to pay over $700 a month for this? Let’s see if there’s a more affordable option that fits your situation.”

Instead, I received periodic nudges—emails and calls—urging me to increase my property insurance coverage. That meant coordinating with a property assessor, letting them in, and ultimately paying more when the policy renewed.

Don’t be lulled into thinking your insurance company is actively looking out for your best financial interests. Their job is to protect you from risk, yes, but they’re also a business. Once you set up auto-debit, they can quietly raise premiums, and you might not even notice. At the end of the day, they have a fiduciary duty—not to you—but to their shareholders.

Is It Legal for Life Insurance to Automatically Renew Like This?

Some of you might have empathy and wonder if jacking up a customer’s life insurance rate by 18 times or more is legal. Sadly, the answer seems to be yes.

If your original policy has a “guaranteed renewal” clause, and you don’t explicitly cancel, the insurance company can continue the coverage as an annually renewable term (ART) policy.

This means:

• You keep your coverage without new underwriting
• But the premium skyrockets every year as you age

Most people don’t realize this clause even exists. It’s often buried deep in the fine print. Therefore, another step for all of us is to thoroughly read the contract and ask questions about things you don’t understand. Don’t just trust your insurance carrier to do the right thing.

So technically, USAA didn’t break the law—but they sure didn’t do me any favors. The representative told me they have clients who pay these huge premiums because they simply can’t get coverage elsewhere.

Many policyholders fall into this trap. They assume the policy just ends—or that premiums stay flat. Insurers bank on that assumption to make maximum profits.

What I Did to Try And Get A Refund

Not one to lie down and get trampled on back and forth by a 7-ton elephant, I decided to contest the charges. I thought I clearly told USAA in 2017-2019 I would not renew the policy at their quoted rate of $450/month. So I most certainly wouldn’t have agreed to $720/month in January 2023 and the most recent $886/month charges.

Here’s what I did

1. Called USAA Immediately

Explained:

• I was not clearly notified of the shift from level term to annual renewable term (ART)
• I explicitly declined their renewal offer i
• I only just discovered the $885.79/month charges
• I’m requesting a retroactive cancellation and full refund of premiums charged since the term expired

I used firm but respectful language, such as:

“I would never have agreed to continue coverage at this rate. I feel misled and would like a refund for all premiums charged after my level term expired.”

2. Escalate if Necessary Or Desired

If USAA doesn’t do something, I may file complaints with:

• My state’s insurance commissioner
• The Better Business Bureau (BBB)
• The Consumer Financial Protection Bureau (CFPB)

These agencies track complaints and put pressure on companies to resolve issues.

My Life Insurance Premium Refund Request

I understand I received coverage during the time I was paying premiums. Had I purchased a new 20-year term policy starting at age 45, I would’ve expected to pay around $150/month, or $1,800/year. I also recognize that if I had died during this period, USAA likely would have paid out the $1 million death benefit to my wife. Thankfully, I’m still alive—so here we are.

That said, I’m not asking for a full refund of the $20,000+ I paid. Instead, I believe a $16,000 refund is a fair compromise ($20,000 I paid minus the $4,000 I would have been willing to pay for two plus years).

No healthy 45-year-old male in 2023 would knowingly agree to pay $886/month for a $1 million term life policy. That’s not just overpriced—it’s highway robbery. I feel like USAA mugged me for my wallet and then slashed my tires on the way out.

How USAA Initially Responded

When I first called USAA to explain what had happened, the life insurance representative I spoke with was dismissive. She said there would be no refund and that the best she could do was cancel the policy. She claimed USAA had sent a notification about the renewal—one I never saw—and added that some members continue paying the exorbitant rate for whatever reason, which in her view justified the lack of follow-up.

After the call, I sat in silence for about 20 minutes, feeling defeated. Then I decided to call back—this time to request proof of where the notification had been sent. Because really, is a notification valid if the client never sees it or confirms their intent? I don’t think so. A default setting that quietly charges a customer 18X more without explicit confirmation feels predatory.

The second representative I reached was much more empathetic. She said she wouldn’t have paid that premium either. She explained that the notification had been sent to my online message center. Sure enough, when I scrolled back to November 2022, I finally found it.

Maybe an email alert had been sent to let me know there was a new message in my inbox—but if so, I missed it. Thankfully, this rep took my concerns seriously. She said she’d escalate the issue to her manager and the “Member Advocacy Team.” Hallelujah.

She assured me the advocacy team would do a thorough review, including listening to our recorded calls and examining the full account history.

The Feedback From USAA After Their Investigation

The representative from the Member Advocacy Team came back with an offer: a credit of two months’ premiums totaling $1,771.58. It was a good first step, but still felt far short. I had hoped for a more reasonable compromise—something closer to a $16,000 credit.

Then the tone shifted. She noted that after reviewing call logs dating back to 2022, she didn’t hear me explicitly say I didn’t want to renew the policy. Instead, she claimed I was simply inquiring about my options. To me, that should’ve strengthened my case—why would I be asking about options if I intended to keep paying an exorbitant premium? But she disagreed.

So I encouraged her to dig deeper into their call logs, further back in time, to see if there was any record of me clearly expressing my unwillingness to pay a fortune for life insurance. She agreed and asked me to email any supporting information I could find in the meantime.

Evidence I Wasn’t Willing To Pay the Higher Premium

I searched my archives and found two articles I had written that clearly documented my struggle to find an affordable life insurance policy before my 10-year term was set to lapse. I sent both to USAA, complete with publication dates, to reinforce my position.

1. “Convert Term Life Into Permanent Life Insurance To Keep Your Rate Class” – Published June 5, 2020
   This post outlines how, after my son was born in 2017, I contacted USAA to explore extending my policy. After undergoing a medical exam, I was shocked to find my premium jump from $40/month to $450/month due to sleep apnea. I declined the offer, stating it was far too expensive, and made it clear I would search for a more affordable option.
2. “How I Finally Got An Affordable Life Insurance Policy With No Medical Exam” – Published December 21, 2021
   This article details how, after years of searching, I finally secured a 20-year, $750,000 term policy through SBLI for $110/month. I noted that I was willing to carry both policies temporarily—doubling coverage for a year—while preparing to transition off the USAA plan.

These publicly documented posts show my intent and efforts to avoid high-cost life insurance by USAA and prove I never agreed to such a steep renewal. I could only hope they help USAA reevaluate their position.

Hard to Trust USAA With Our Insurance Needs Anymore

Unfortunately, USAA came back from further investigation and said the $1,771.58 credit was the best they could do. They were shutting the case. Ugh.

What’s most disappointing is that, after 23 years as a loyal USAA member, I truly believed the company would do right by me. I’ve consistently paid my premiums on time and have been a responsible, engaged customer.

Most people don’t fully understand the intricate details of life insurance policies, renewals, and their fine print. I did my best to stay informed, yet I still feel like I was misled and ultimately taken advantage of. Communication is not effective if the other side doesn’t receive or acknowledge.

Without a more equitable resolution, it’s hard for me to continue placing my trust in USAA.

The One Silver Lining From This Careless Debacle

If there’s any silver lining, it’s this: by sharing my story, I hope to prevent at least one person from falling into the same trap. Don’t assume your term life insurance policy ends when the term is up—it often doesn’t. Unless you actively cancel it, it may auto-renew, and the premiums can skyrocket.

All this time, I thought I was being a responsible father and husband—saving money and protecting my family in case I were to pass. In reality, I was a careless fool who failed to double-check his expenses.

As a result, I actually put my family in a more compromised position due to our reduced monthly cash flow. I had bought a house in October 2023, which drained my liquidity and increased my stress for at least six months.

The first year after a home purchase is the most financially vulnerable time and I sure could have used that extra ~$800/month in health insurance premiums I didn’t realize I was paying.

Tips to Save Money on Life Insurance Premiums

• Be loud and clear about your intentions on recorded calls—don’t assume anything will be understood or noted unless you say it explicitly.
• Review your expenses monthly. Don’t let auto-debits go unchecked. If something looks off, cancel or investigate immediately.
• Lock in a 30-year term life policy around age 30 while you’re still young and likely healthier for the best rate. Your life will most likely get more complicated and expensive.
• Avoid unnecessary doctor visits right before applying for life insurance—they might uncover minor issues that raise your premium.
• Don’t expect your insurance carrier to proactively save you money. Their goal is to maximize profits, not look out for you.
• If you’ve had health issues, go on a health kick for at least six months—then reapply to try qualifying for a better rate.
• No matter how badly you fail, keep fighting to protect your family’s financial security. No one else will do it for you.

Going forward, I’m returning to my “broke mindset”—keeping my checking account lean, like a college student on minimum wage. Having extra cash flow felt nice, but for me, it bred complacency and laziness. That ends now.

As punishment for my carelessness, I’m committing to a strict no-spend challenge until I make up for the $14,228.42 in excessive life insurance premiums I paid ($20,000 total minus the $1,771.58 refund and the $4,000 I would’ve paid for 26 months of coverage). Alternatively, I’ll side hustle or make new investments to recoup the $14,228.42 in overcharges.

I’ve already spent hours fighting my case and writing this post, and I hope it helps you make better life insurance decisions. Now it’s time to move forward in the way only I know how.

Readers, have you ever gone through something similar with a life insurance policy—or any other product or service? Have you ever discovered you were paying for something you didn’t realize, thanks to auto-debiting or just plain oversight? If so, please share your story so I don’t feel like the only one who got duped by carelessness. Misery loves company—and maybe we can all learn a little from each other’s mistakes.

Life Insurance Policy Recommendation

If you have debt and dependents, getting life insurance is one of the most responsible financial moves you can make. I recommend checking out Policygenius, an insurance marketplace I’ve trusted for over 10 years. Simply enter your coverage needs, and Policygenius will match you with top-rated carriers offering competitive rates.

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