Why Term Insurance is Non-Negotiable for Every Family
Term insurance is the foundation of financial planning. Here's why every family needs adequate coverage.
In the world of financial planning, term insurance is the foundation that everything else rests on. Yet, a surprisingly large number of Indian families either don't have it, or have inadequate coverage. Here's why that needs to change.
What is Term Insurance?
Term insurance is the simplest, purest form of life insurance. You pay a premium, and if you pass away during the policy term, your family receives a large lump sum (the sum assured). There is no investment component — it's 100% protection. And because of this simplicity, it is extremely affordable.
💡 A healthy 30-year-old can get ₹1 Crore in coverage for as little as ₹700–₹900 per month. That's less than a monthly OTT subscription.
How Much Cover Do You Need?
A common rule of thumb is 10–15x your annual income. So if you earn ₹10 lakhs per year, aim for a ₹1–1.5 Crore policy. You should also factor in outstanding loans (home loan, car loan) and your family's future expenses like children's education.
Term vs Traditional Insurance
Many families buy endowment or money-back policies thinking they combine insurance and savings. However, these products deliver poor returns (4–5%) and inadequate coverage. The smarter approach: buy a pure term plan for protection, and invest the premium difference in mutual funds for wealth creation.
- Term Plan Premium for ₹1Cr cover: ~₹800/month
- Endowment premium for similar cover: ~₹8,000–₹12,000/month
- Premium saved: ₹7,200+/month → invest in SIP for far better returns
Who Needs Term Insurance?
If you have dependents — spouse, children, parents — who rely on your income, you need term insurance. The day you start earning is the day you should buy it. Premiums are lowest when you're young and healthy.
Get the right term cover for your family
KoshPath helps you compare plans from leading insurers and choose the best coverage at the lowest premium.
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