In short, it acts as a financial safety net for your family.

Types of Life Insurance in India. Here are the most common types:

1. Term Life Insurance:
– Pure protection
– High coverage at low premium
– No maturity benefit (unless you take return of premium option)
– Ideal for: Individuals looking for affordable and high-value protection

2. Endowment Plan:
– Insurance + Savings
– Maturity benefit if you survive the term
– Lower coverage compared to term
– Ideal for: Conservative savers who want some returns

3. ULIP (Unit Linked Insurance Plan):
– Insurance + Investment in market-linked funds
– Returns depend on fund performance
– Lock-in period: 5 years
– Ideal for: Investors who want wealth creation along with protection

4. Whole Life Insurance:
– Coverage up to age 99 or 100
– Higher premiums, lifelong protection
– Can be used for legacy or estate planning
– Ideal for: People with long-term wealth transfer goals

How Much Life Insurance Do You Need?
Use the Income Replacement Rule or Human Life Value (HLV) method.
A general rule:

Life cover = 15 to 20 times your annual income

Also consider:
– Outstanding loans
– Children’s education expenses
– Monthly family needs
– Inflation

❗Mistakes to Avoid:
– Taking insufficient cover just to save on premium
– Hiding medical conditions (can lead to claim rejection)
– Not reviewing or updating nominee details
– Mixing investment and insurance without clear goals

🛡️ Why You Shouldn’t Delay:
The earlier you buy, the lower your premium.
A 25-year-old healthy non-smoker pays less than ₹500/month for ₹1 Cr term cover.
At 35, the premium almost doubles for the same policy.