Insurance Planning Guide India

Insurance protects the plan

Investments build wealth, but insurance protects the household from financial shocks. Term insurance is important when others depend on your income.

Health insurance reduces the chance that medical expenses force debt or premature investment withdrawals.

Cover should match responsibilities

Life cover depends on income, liabilities, dependents, future goals, and existing assets. A generic multiple of salary can be a starting point, but not the final answer.

Loans, children's education, spouse support, and parent responsibilities should be considered.

Avoid mixing insurance and investment blindly

Products that combine insurance and investment should be evaluated carefully for cover amount, return, charges, lock-in, and flexibility.

For many households, separate term insurance and goal-based investing may be clearer and more flexible.

Worked example: how much term cover

Someone earning Rs 12 lakh a year with a Rs 30 lakh home loan and two young children might start with 10 to 15 times income, or Rs 1.2 to 1.8 crore, and then add the outstanding loan.

Existing savings and investments can reduce the cover needed. Review the amount after marriage, a child, a new loan or a large income change.

Frequently asked questions