Agent’s Pitch (2022): “Sir, this ULIP gives insurance + investment + tax saving! Three-in-one!”
Reality (2026): ₹50,000/year premium, ₹40,000 gone in charges first year, investment value: ₹8,000.

Your CA’s Whisper: “Buy term insurance for protection. Invest separately. You’ll save ₹25 lakhs over 20 years.”

If insurance confuses you, you’re not alone. 73% of insured Indians have the WRONG policies (IRDAI data). This isn’t about buying insurance. This is about buying the RIGHT insurance and saving lakhs in wrong premiums.

Part 1: The 3 Insurance Lies Sold to Middle-Class Indians

Lie 1: “Insurance is Investment”

• Truth: Insurance = Protection. Investment = Wealth building.
• Cost: Mixing costs 30-50% extra over 20 years.
• Example: ₹50 lakh term cover (age 30): ₹7,000/year vs ULIP: ₹50,000/year for same cover.

Lie 2: “You Need Life Insurance If Single”

• Truth: Life insurance protects dependents’ future income.
• Rule: No dependents = Minimal life insurance needed.
• Better: Health insurance + accident cover + critical illness.

Lie 3: “Corporate Insurance is Enough”

• Truth: Job loss = Insurance loss when most needed.
• Solution: Corporate insurance + Personal top-up.
• Cover: Minimum ₹10 lakh health, ₹1 crore term (if dependents).

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Part 2: The Priority Pyramid (What to Buy FIRST)

Layer 1: NON-NEGOTIABLE (Month 1)

Health Insurance:

• Cover: ₹10 lakh+ (post-COVID reality)
• Type: Family floater + Super top-up
• Cost: ₹15,000-₹25,000/year family of 4
• Check: Room rent limit, pre-existing waiting, co-pay

Personal Accident:

• Cover: ₹25-50 lakh
• Cost: ₹1,500-₹3,000/year
• Why: Disability = Loss of income + Medical costs

Layer 2: IF YOU HAVE DEPENDENTS (Month 2)

Term Insurance:

• Cover: 10-15× annual income
• Tenure: Till retirement (60) or till last dependent settled
• Cost: ₹1 crore for 30-year-old = ₹8,000-₹12,000/year
• Rider: Critical illness (extra 20-30% premium)

Layer 3: NICE TO HAVE (Month 3-6)

Critical Illness:

• Cover: ₹10-25 lakh lump sum
• Why: Treatment + income loss during recovery

Home Insurance:

• Cost: 0.1% of home value/year
• Cover: Natural disasters, theft, fire

Motor Insurance: Comprehensive (mandatory)

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Part 3: The Term Insurance Calculator for Indians

How Much Cover You Actually Need:

1. Family's annual expenses: ₹______ × 15 years = ₹______
2. Children's education: ₹______ (per child)
3. Children's marriage: ₹______ (per child)
4. Home loan balance: ₹______
5. Other debts: ₹______
6. Minus existing assets: ₹______
7. Minus spouse's income potential: ₹______

TOTAL TERM COVER NEEDED = ₹______

Example (Middle-class family):

• Expenses: ₹6 lakh/year × 15 = ₹90 lakh
• 2 Children education: ₹50 lakh
• Home loan: ₹30 lakh
• Total: ₹1.7 crore
• Minus PF/other assets: ₹20 lakh
• Final cover: ₹1.5 crore

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Part 4: Health Insurance Decoded

The 2026 Must-Have Features:

1. No room rent limit (or high limit like ₹5,000/day)
2. No co-payment (or max 10% for lower premium)
3. Restoration benefit (renews full sum insured after claim)
4. Day-care procedures covered (300+ procedures)
5. Pre-existing waiting (2-4 years maximum)

Super Top-up Strategy:

• Base policy: ₹5-10 lakh
• Super top-up: ₹10-25 lakh (activates after base exhausted)
• Cost saving: 40-60% vs single large policy

Example: ₹25 lakh cover:

• Option A: ₹25 lakh policy = ₹25,000/year
• Option B: ₹5 lakh + ₹20 lakh super top-up = ₹15,000/year
• Savings: ₹10,000/year

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Part 5: The Claims Process Made Simple

Health Claim Checklist:

Before Hospitalization:

1. Inform insurer within 24 hours
2. Check network hospital
3. Get pre-authorization

During Hospitalization:

1. Keep all bills
2. Get daily updates from TPA/insurer
3. Maintain file with all documents

After Discharge:

1. Submit within 7-30 days
2. Follow up every 3 days
3. Escalate to IRDAI if delay >30 days

Term Claim Process:

1. Immediate: Inform insurer, get claim form
2. 30 days: Submit death certificate, policy docs, medical records
3. 45 days: Insurer investigates
4. 90 days: Settlement (by law)

Pro Tip: Nominee should know insurer contact, policy number, agent details.

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Part 6: Insurance Mistakes & How to Avoid

❌ Mistake 1: Underinsurance

Problem: ₹2 lakh health cover when heart surgery costs ₹5 lakh+
Solution: Minimum ₹10 lakh, better ₹25 lakh

❌ Mistake 2: Overlapping Policies

Problem: Health insurance from employer + personal + credit card
Solution:* One comprehensive policy, others as top-up

❌ Mistake 3: Hiding Medical History

Problem: Claim rejected, premium forfeited
Solution:* Disclose everything. Premium might be higher but claim sure.

❌ Mistake 4: Not Increasing Cover

Problem: ₹50 lakh term at 30, still ₹50 lakh at 45 (inflation!)
Solution:* Increase cover every 5 years or buy increasing cover policy

❌ Mistake 5: Ignoring Small Print

Problem:* “Domiciliary treatment not covered”
Solution:* Read policy wordings. Ask agent to explain every exclusion.

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Part 7: Your 2026 Insurance Action Plan

This Weekend: Insurance Audit

1. List all policies with sum insured, premium, expiry
2. Check coverage gaps
3. Calculate if underinsured

Month 1-2: Fix Critical Gaps

1. Boost health insurance to ₹10 lakh+
2. Buy term insurance if dependents
3. Add personal accident cover

Month 3-6: Optimize

1. Review and remove unnecessary policies
2. Add riders if needed
3. Set premium payment reminders