Most young Indians are sold insurance as investment. ULIP, endowment plans, money-back policies — these are among the worst financial products you can buy. They deliver poor returns AND inadequate coverage. Avoid them.
Real insurance is about two things: protecting your income and protecting your health.
- 1 Term Insurance — Buy pure term cover of at least 15–20× your annual income. A 25-year-old can get ₹1 crore cover for under ₹700/month. Do this before any investment. If you die young and have dependants, nothing else matters.
- 2 Health Insurance — Don’t rely only on employer coverage. Get your own floater plan of minimum ₹5–10 lakh. If you change jobs, get sick, or go freelance, your employer cover vanishes. Your personal policy does not.
- 3 Critical Illness Rider — Optional but valuable. A lump-sum payout on diagnosis of cancer, heart attack, or stroke. Medical costs for serious illness routinely wipe out family savings in India.