Puisa Kotha Hunibo? Insurance. What comes to your mind?

Say ‘insurance’ and most of us are already a little uninterested. Maybe it’s the incessant calls from agents. Maybe it’s the long explanations that don’t really explain anything. Maybe it’s because some of us have already bought policies without fully understanding what they do or how they work.

For many of us here, insurance feels confusing at best and pushy at worst. So we avoid it. Or we agree to something just to get it over with. But all of this makes it easy to miss what insurance is actually for.

Not all insurance is complicated. For example, term life insurance. If you have people who depend on your income, parents, siblings, a partner, you need term insurance. Not those fancy plans that promise returns or maturity benefits. Just a plain, simple term insurance.

Here’s a practical rule: get coverage worth 10 times your annual income. If you earn Rs. 6 lakh per year, aim for a Rs. 60 lakh cover. This ensures that if something happens to you, your family has enough money to maintain their lifestyle for several years without immediate financial stress.

Term insurance is incredibly cheap when you’re young and healthy. A 25-year-old can get Rs. 1 crore term insurance for less than Rs 10,000 per year. The same coverage will cost much more if you wait until you’re 35 or 40.

The bigger issue is not the cost. It is the confusion. Many of us end up buying plans that mix insurance with investment because that is what gets sold the most. They sound attractive, but are expensive and usually give poor returns.

Start by keeping it simple. Insurance for protection. Investments for growth. We can always build on that in the future.

This is something we often break down in Moneybar sessions as well. Keeping money decisions simple, practical, clear, and rooted in real life, not just what gets sold the most. We may not like to talk about it often, but knowing this much can go a long way.

The original published column can be found at : Insurance. What comes to your mind?