Problem: What’s The Best Form Of Life Insurance To Have?

A pure term-insurance plan.

Don’t throw your hard earned money at any of these: endowment plans, money back plans, whole life plans, children plans, special plans for men, women, or whatever, and unit-linked plans. These schemes try to make a monkey out of life insurance by attempting to invest (and at times, gamble) on your behalf. You pay ridiculously high premiums for ridiculously low coverage.

Let’s not even get into the combinatorially exhaustive but mutually exclusive hare-brained riders available with these schemes. Dig into the website of any insurance company operating in India and you’ll know what I am talking about.

The Simple Dollar says it best:

Insurance as an investment is a great investment for the insurance company but a terrible one for you.

Here’s a simple set of questions for you to answer:

  • How many among you were lured by the exotic sounding lacs-of-rupees/kickbacks -from-the-first-premium the insurance agent tempted you with while selling the policy?

  • How many among you pay Rs.50,000+ as annual premiums just because the agent conjured up magical figures as income tax savings?

  • Did you even know – or did the agent ever tell you – that there was something called as term insurance?

Be honest and drop a comment.

The idea behind life insurance is simple: you die, but do so without putting your family/dependents into financial hardship. You shouldn’t have to do that without having to first pay a fortune to the insurance company before you die. Unfortunately, the profit-minded insurance companies operating in India can’t understand this.

I’ve researched extensively on life insurance over the past month and have concluded that a simple no-frills pure term assurance plan is the best form of life insurance.

Don’t be taken for a ride. It’s your hard earned money.

12 thoughts on “Problem: What’s The Best Form Of Life Insurance To Have?

  1. ಏನಿದು ಅಸಹ್ಯ. ‘S’ ಮತ್ತು ‘R’ ಗೆ ಸಾವಿರಾರು ಅರ್ಥಗಳು ನಾನು ಕಲ್ಪನೆ ಮಾಡಿಕೊಳ್ಳುವ ಮುನ್ನ ತುಂಬು ಹೃದಯದಿಂದ ನಿಮ್ಮ ಪೂರ್ಣ ಹೆಸರುಗಳನ್ನು ಬಳಸುವಂತವರಾಗಿ.

  2. S, choose Life Insurance Corporation of India (LIC) simply for the reason that their policies come with a sovereign (government) guarantee. Private insurance companies do not enjoy such a backing. LIC offers two term assurance plans – Jeevan Anmol and Amulya Jeevan. You can go through the details at LIC’s website and decide what suits you best. Email me if you need any help.

  3. Just an additional FYI for anyone interested
    A pure risk plan will provide a cover of around 20 lakhs at a premium of around 5k per year for a person below 30 yrs. An agent would be able to provide the exact amount. This is the best plan for people who have loans as their family’s financial future is covered in case of any eventuality.

    I would say this is a must for any sole breadwinner in a family.

  4. Vinaya: haven’t seen any “life insurance” post from since a long time. i was shopping for a term insurance plan and am a bit confused. i am inclined to go with LIC (for the sovereign guarantee that comes with it and seeing the travails of companies like AIG etc.). but, LIC’s premium for term plans seems to be 40-50% higher than those from private insurance companies. plus, LIC doesn’t offer any riders (e.g. Accident Death Benefit, Disability, Critical illness). I am also not sure about the claims process of various companies. How easy or difficult is it for survivors to claim insurance benefit from various companies? What use is it having an insurance policy when your loved ones have to run pillar and post to claim it? What has been your readers’ experience on this. thanks a ton in advance.

  5. please clear my confusion which term plan is best for me need 10 lakh cover for 5-10 years my adge is 36 years.i am considring for sbi life sheild ,lic anmol jeevan.

  6. yes! Anmol Jeevan is the best. you have to pay for your cup of coffee. If add on is required again premium loading which is available in endowment, money back etc., plans.

  7. hi

    firstly i would like thank you for putting nice information in this website.

    I would like to contact you please mail me your contact details


  8. “Thanks for dipelling yths regarding what kinds of life insurance one should choose given the wide gamut of choices one faces ,the article has really helped me understand a lot! :) Have been searching for tutorials on how to plan for insurance according to my budget and needs, especially health insurance .. This tool came in handy too! Enjoy :)

Leave a Reply