A friend of mine spent 19 years around the insurance industry — starting with the IRDA exam in 2007, and later in Corporate Strategy at ICICI Prudential Life Insurance. This is what he's been telling everyone who'll listen.
Ask this question in any group of working professionals and watch the silence: "How many of you have a ₹1 Crore term insurance policy — not a ULIP, not an LIC endowment plan?"
Most people either don't have life insurance at all, or they have something an advisor sold them years ago that they've never actually looked at closely. According to him, this isn't an accident.
The manipulation, in plain terms
When you're 22-25 years old and just started earning, a ₹1 Crore term plan can cost as little as ₹500-700 a month — less than a food delivery order. At that price point, an advisor's commission on your premium is tiny. It isn't worth their time to sit with you for an hour explaining a plan that earns them a few hundred rupees.
So what do they sell you instead? A ULIP — Unit Linked Insurance Plan. You'll be told it "gives you insurance, market returns, and tax saving, all in one." It sounds efficient. Here's what usually isn't explained alongside it:
- ULIP premiums typically run 10-20x higher than a pure term plan, for a fraction of the actual life cover
- A large chunk of your premium in the early years goes toward premium allocation, fund management, mortality, and policy admin charges — before a rupee touches the market
- The insurance component is usually small, often close to 10x your annual premium, nowhere near ₹1 Crore
- A mutual fund SIP typically offers more transparent market exposure without an insurance wrapper
- There are simpler ways to save tax that don't lock you into a 15-20 year contract with high charges
Then there's the LIC route
Most people's first brush with "insurance" is an LIC endowment or money-back plan, usually bought through a family agent or relative out of obligation. Respectfully — these are savings products dressed up as insurance. The actual life cover is small relative to what you pay, and the returns barely beat inflation over 20 years. It isn't what your family needs if something happens to you tomorrow.
Insure your life the way you insure your vehicle — except lock it in once
You renew your vehicle insurance every year without thinking twice. Your life needs the same discipline, except here you get to lock in a rate once and keep it for decades. The day you get your first salary is the day to buy term insurance — not "after marriage," not "after kids," not "next year."
Why age matters so much
Insurers price term insurance on mortality risk — the statistical likelihood of death at your current age, projected across the policy term. The younger and healthier you are when you lock in the rate, the lower your premium stays for the entire term, often 30-35 years.
Wait till you're 40, and the same ₹1 Crore cover can cost ₹18,000-20,000+ a year, more with any health history. Wait till 50, and it can climb to ₹35,000-45,000+. The insurer isn't being unfair here — this is actuarial math. But the advisor who could have sold you this at 25, for a fraction of the cost, had no incentive to.
Move the slider to your current age. This shows roughly what a healthy, non-smoking applicant pays each year for a pure term plan with ₹1 Crore life cover, running until age 60-65 — the earlier you lock it in, the longer that low rate stays fixed.
At this age, waiting even 5 more years typically pushes this premium up — — because pricing is based on your age at purchase, not the age you eventually claim.
| Age | Est. annual premium (₹1 Cr, till 60-65) |
|---|---|
| 25 | ~₹7,500/year |
| 30 | ~₹9,500/year |
| 35 | ~₹13,000/year |
| 40 | ~₹18,000/year |
| 45 | ~₹26,000/year |
| 50 | ~₹38,000/year |
| 55 | ~₹58,000/year |
What happens once you quit or retire
The health and life cover your employer gives you disappears the day you leave. If you're diagnosed with a critical illness after that, or if something happens to you, your family is on their own — unless you have a personal term policy and health cover running independently in your own name, one that doesn't depend on your employment.
His honest advice
- In your 20s or early 30s? Take a ₹1 Crore term plan this week. Compare 4-5 insurers directly online, not through an advisor who profits from steering you elsewhere.
- Already have a ULIP you were told is "your insurance"? Check the actual life cover in your policy document — you may be surprised how small it is.
- Only covered by your employer's group policy? Get personal term insurance separately, before a health scare makes it more expensive or, in the worst case, uninsurable.
