🛡️ Insurance 6 min read·Updated 1 July 2026
Insurance Basics: What Cover You Actually Need
Insurance protects your family from catastrophic financial shocks — nothing more. It is not a wealth-building tool.
Term insurance
- Cover: 10–15× your annual income, or enough to clear all liabilities and fund family for 15 years.
- Tenure: until age 60 or your planned retirement.
- Type: pure term. No return of premium, no ULIP, no endowment.
- Cost: a healthy 30-year-old can get ₹1 crore cover for ~₹10,000–15,000 a year.
Health insurance
- Family floater: at least ₹10 lakh in metros.
- Separate cover for parents (they cost more but avoid depleting your own cover).
- Top-up plans give large additional cover at low premium — great combo.
Why not endowment/ULIP?
Traditional plans mix insurance with investment. The result: low cover, low return (usually 4–6% IRR), and a long lock-in. Almost always better to buy term + invest the difference in mutual funds.
Common mistakes
- Skipping health insurance because employer covers you — that cover vanishes the day you switch jobs.
- Buying insurance only in March for tax.
Frequently asked questions
Do I need life insurance if I am single with no dependents?+
Health insurance yes, life insurance usually no.
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