11 mins read
Term Insurance Explained: The Only Guide That Won’t Bore You to Death (Pun Intended!
🎭 Why Do We Need Term Insurance?
15 Hilarious Questions That’ll Make You Laugh (And Then Buy Insurance)
Warning: This post contains dad jokes, brutal honesty, and life-saving financial advice. Side effects may include actually understanding insurance and buying a policy. Proceed with caution! 😄
1
Q: Why do I need term insurance? I’m young, healthy, and basically immortal!
A: Ah yes, the “I’m invincible” phase! We all had it. Unfortunately, life didn’t get the memo. Term insurance isn’t for YOU—it’s for the people who depend on you financially. Your parents, spouse, kids, or even that sibling who still owes you money.
🎯 Reality Check: Accidents don’t check your age before happening. Also, young = cheaper premiums. A 25-year-old pays ₹10,000/year for ₹1 crore coverage. A 40-year-old? Triple that!
2
Q: Isn’t term insurance just throwing money away? I pay premiums and get nothing back!
A: By that logic, wearing a seatbelt is “throwing away comfort” because you didn’t use it in an accident! You also pay for fire insurance on your house, right? Hope you never use that either!
💡 The Truth: Term insurance is NOT an investment—it’s PROTECTION. You’re not buying a return; you’re buying peace of mind. If you never claim it, congratulations! You lived! That’s literally the best return ever.
3
Q: But dude, I’m single with no dependents. Who needs the money when I’m gone?
A: Plot twist: Your parents might depend on you financially in their retirement! Also, plans change. Today you’re single; tomorrow you’re married with a home loan. Insurance gets expensive as you age, so buy it NOW while it’s cheap!
🎪 Fun Fact: Getting term insurance is easier when healthy. Try getting it AFTER you develop diabetes or high BP. Spoiler: You’ll either pay 3x more or get rejected. It’s like trying to buy an umbrella during a thunderstorm!
4
Q: My company gives me life insurance. I’m covered, bro!
A: Congrats! But let’s do some math. Company life insurance is usually 2-5x your annual salary. If you earn ₹10 lakhs/year, that’s ₹20-50 lakhs coverage. Sounds good? Now calculate: How many years will that support your family? 2 years? 3 years?
⚠️ Plot Hole: Company insurance disappears when you leave the job. Change jobs? Coverage gone. Get fired? Coverage gone. Company shuts down? You guessed it—GONE! Your family’s financial security shouldn’t depend on your employment status.
5
Q: What about those fancy insurance plans that give me money back? Those seem better!
A: Ah, you’ve discovered ULIPs and endowment plans! They’re like ordering a pizza-burger combo—sounds innovative, but both items are mediocre. These “investment+insurance” hybrids give you:
- ❌ Lower coverage (because you’re paying for investment too)
- ❌ Poor returns (4-6% vs mutual funds’ 12%)
- ❌ High charges (up to 30% of your first year premium!)
- ❌ Long lock-in periods (can’t escape for 5-10 years)
✅ Smart Move: Buy pure term insurance for ₹10,000/year (₹1 crore coverage) + invest remaining ₹40,000 in mutual funds. After 20 years, you’ll have ₹1.5 crores vs ₹15 lakhs from endowment plans!
6
Q: How much coverage do I actually need? ₹50 lakhs sounds like a lot!
A: Here’s the magic formula: Coverage = (Annual expenses × 20) + Outstanding debts
Let’s say your family needs ₹50,000/month (₹6 lakhs/year):
- 20 years of expenses = ₹6 lakhs × 20 = ₹1.2 crores
- Home loan outstanding = ₹30 lakhs
- Kids’ education fund = ₹20 lakhs
- Total needed = ₹1.7 crores
🎯 The goal: If invested wisely, this amount should generate enough returns (8-10%) to replace your income forever without touching the principal. It’s like leaving your family a money-printing machine!
7
Q: Okay fine, but I’ll buy it later. Maybe next year when I have more money?
A: *Slaps table* THIS IS THE TRAP! “Later” is how people end up paying 3x more or becoming uninsurable!
📊 Premium Shock:
• Age 25: ₹10,000/year for ₹1 crore
• Age 35: ₹18,000/year for same coverage
• Age 45: ₹35,000/year (if you’re still healthy!)
Wait 10 years, pay double. Wait 20 years, pay 3-4x more. “Later” is expensive!
• Age 25: ₹10,000/year for ₹1 crore
• Age 35: ₹18,000/year for same coverage
• Age 45: ₹35,000/year (if you’re still healthy!)
Wait 10 years, pay double. Wait 20 years, pay 3-4x more. “Later” is expensive!
Also, next year you might develop high BP, diabetes, or a thyroid condition (thanks, desk job and butter chicken!). Good luck getting affordable insurance then!
8
Q: Insurance companies are scammers! They never pay claims, right?
A: Wrong! In FY 2023, insurance companies in India had a 98%+ claim settlement ratio. That means 98 out of 100 claims were paid! The 2% rejections? Usually because people lied on their application (smoker ticking “non-smoker” checkbox, we see you!).
🛡️ How to Ensure Your Claim Gets Paid:
- ✅ Disclose EVERYTHING honestly (medical conditions, smoking, drinking)
- ✅ Choose reputed insurers (LIC, HDFC Life, ICICI Pru, Max Life)
- ✅ Keep your policy active (don’t miss premium payments)
- ✅ Tell your family where the policy documents are!
9
Q: I’d rather invest that money in crypto/stocks. Better returns!
A: *Deep breath* Insurance and investment are DIFFERENT things! You wear a helmet AND drive carefully, right? You don’t choose between safety and reaching your destination!
🎲 Crypto Bro Logic:
“I’ll make so much money, my family won’t need insurance!”
*Market crashes 80%*
“Why is my family asking why there’s no insurance?”
Investments can go up OR down. Insurance coverage is guaranteed (if you, you know, die). Not a fun thought, but that’s the point!
“I’ll make so much money, my family won’t need insurance!”
*Market crashes 80%*
“Why is my family asking why there’s no insurance?”
Investments can go up OR down. Insurance coverage is guaranteed (if you, you know, die). Not a fun thought, but that’s the point!
10
Q: My spouse works too. We both earn. Do we both need insurance?
A: YES! If both incomes are needed to maintain your lifestyle, both lives need insurance. Think about it:
- Current lifestyle needs two incomes
- EMIs, rent, school fees, expenses continue
- Surviving partner might need to reduce work hours for childcare
- Emergency expenses, medical bills, final expenses
💡 Pro Tip: Even if one spouse is a homemaker, consider insurance! Childcare, cooking, household management have value. Replacing these services costs money. A homemaker’s coverage should be 5-7x annual household expenses.
11
Q: But I have health insurance! Isn’t that enough?
A: Health insurance pays hospital bills. Term insurance replaces your INCOME. Totally different animals!
🏥 Scenario Time:
You have a heart attack (touchwood, no!). Health insurance covers the ₹8 lakh hospital bill. Great! But:
• Who pays the home loan EMI for next 20 years?
• Who funds your kid’s college?
• Who maintains the family’s lifestyle?
• Who covers your spouse’s reduced earning years?
Health insurance = hospital bills. Term insurance = everything else!
You have a heart attack (touchwood, no!). Health insurance covers the ₹8 lakh hospital bill. Great! But:
• Who pays the home loan EMI for next 20 years?
• Who funds your kid’s college?
• Who maintains the family’s lifestyle?
• Who covers your spouse’s reduced earning years?
Health insurance = hospital bills. Term insurance = everything else!
12
Q: The application process seems complicated. Do I really need to answer all those questions?
A: YES! Those “annoying” questions are what protect your claim later. Insurance companies aren’t being nosy—they’re documenting your health so there’s no confusion during claims.
⚡ True Story: Guy ticked “non-smoker” to save ₹2,000/year on premiums. Died of lung cancer. Claim rejected because medical records showed 15-year smoking history. His family lost ₹1 crore over ₹2,000 savings. Don’t be that guy!
Golden Rule: When in doubt, DISCLOSE! That occasional social smoking? Mention it. Pre-diabetes? Mention it. Family history of heart disease? Mention it. Better to pay slightly higher premium than risk claim rejection.
13
Q: Should I add riders like critical illness, accidental death, etc.?
A: Riders are like extra toppings on pizza—nice to have if budget allows, but don’t stress!
Useful Riders:
✅ Accidental Death Benefit: Extra payout if death is accidental (cheap, ₹500-1,000/year)
✅ Critical Illness: Lump sum if diagnosed with cancer, heart attack, etc. (helpful!)
✅ Premium Waiver: Future premiums waived if you become disabled
Skip These:
❌ Return of Premium: Makes policy 3-4x more expensive. Defeats the purpose!
❌ Income Benefit: Usually not worth the extra cost
✅ Accidental Death Benefit: Extra payout if death is accidental (cheap, ₹500-1,000/year)
✅ Critical Illness: Lump sum if diagnosed with cancer, heart attack, etc. (helpful!)
✅ Premium Waiver: Future premiums waived if you become disabled
Skip These:
❌ Return of Premium: Makes policy 3-4x more expensive. Defeats the purpose!
❌ Income Benefit: Usually not worth the extra cost
💡 Budget tip: Buy high coverage FIRST, add riders later. ₹1 crore coverage > ₹50 lakh coverage + fancy riders!
14
Q: This is all depressing. Do I really need to think about dying?
A: Here’s the thing: Buying term insurance is one of the MOST loving things you can do for your family. It’s literally saying, “Even if I’m not here, you’ll be financially okay.”
❤️ Perspective Shift:
Term insurance isn’t about death—it’s about LIFE. It’s about your kids completing education. Your spouse not losing the house. Your parents not becoming financially dependent on others. Your family maintaining dignity and choices during the hardest time of their lives.
It’s 30 minutes of paperwork and ₹1,000/month for ₹1 crore of love and protection. When you think of it that way, it’s actually beautiful!
Term insurance isn’t about death—it’s about LIFE. It’s about your kids completing education. Your spouse not losing the house. Your parents not becoming financially dependent on others. Your family maintaining dignity and choices during the hardest time of their lives.
It’s 30 minutes of paperwork and ₹1,000/month for ₹1 crore of love and protection. When you think of it that way, it’s actually beautiful!
15
Q: Okay, you convinced me! What do I do NOW?
A: YES! Here’s your action plan:
🚀 Your Next Steps:
This Week:
1️⃣ Calculate coverage needed (20x annual expenses + debts)
2️⃣ Research top insurers (check claim settlement ratios)
3️⃣ Get quotes online (PolicyBazaar, BankBazaar, or directly from insurers)
This Month:
4️⃣ Compare 3-4 policies (don’t just go for cheapest!)
5️⃣ Fill application HONESTLY
6️⃣ Complete medical tests if required
7️⃣ Pay first premium → YOU’RE COVERED!
Quick Tips:
• Choose coverage term till age 60-65
• Online policies are 10-15% cheaper
• Pay annually instead of monthly (saves money)
• Tell your family about the policy!
• Review coverage every 3-5 years (increase if needed)
This Week:
1️⃣ Calculate coverage needed (20x annual expenses + debts)
2️⃣ Research top insurers (check claim settlement ratios)
3️⃣ Get quotes online (PolicyBazaar, BankBazaar, or directly from insurers)
This Month:
4️⃣ Compare 3-4 policies (don’t just go for cheapest!)
5️⃣ Fill application HONESTLY
6️⃣ Complete medical tests if required
7️⃣ Pay first premium → YOU’RE COVERED!
Quick Tips:
• Choose coverage term till age 60-65
• Online policies are 10-15% cheaper
• Pay annually instead of monthly (saves money)
• Tell your family about the policy!
• Review coverage every 3-5 years (increase if needed)
Final Dad Joke: Why did the young professional buy term insurance? Because they realized “YOLO” actually means “Your Outstanding Loans Outlive” you! 😄
🎯 The Bottom Line
Term insurance isn’t sexy. It’s not exciting. You can’t show it off on Instagram. But it’s the most responsible, loving, and mature financial decision you’ll ever make.
₹1,000/month × 12 months × 30 years = ₹3.6 lakhs
That’s what you’ll pay for ₹1 crore coverage.
One single medical emergency can cost more than that. One accident can wipe out your family’s future. Don’t wait for “someday.” Someday is today.
💭 Remember This
“The best time to buy term insurance was 10 years ago.
The second best time is RIGHT NOW.
The worst time is tomorrow (after something happens).”
Stop reading. Start applying. Your future family is counting on your present self!
