Term Insurance: The Only Life Insurance You Need
Why we recommend pure term insurance over ULIPs and endowment plans. The BTID strategy that protects your family AND grows your wealth.
The Golden Rule: Don't Mix Insurance with Investment
This is the single most important piece of financial advice we can give you. When you buy a ULIP or endowment plan, you're paying for both insurance AND investment—and getting the worst of both worlds.
🚫 The Problem with ULIPs & Endowment Plans
- ✗Low cover: For ₹10,000/month premium, you might get only ₹10-20 lakh cover
- ✗Poor returns: After charges, returns often match or trail FDs (4-6%)
- ✗High charges: Premium allocation, fund management, mortality charges eat into returns
- ✗Lock-in period: Your money is stuck for 5+ years
What is Term Insurance?
Term insurance is pure life insurance. You pay a small premium, and if something happens to you during the policy term, your family gets a large sum (the cover amount). There's no investment component, no maturity benefit—just protection.
✓ Why Term Insurance Wins
- ✓High cover: Get ₹1 Crore cover for just ₹10,000-15,000/year
- ✓Affordable: 10-20x cheaper than traditional policies for same cover
- ✓Simple: No hidden charges or complex terms
- ✓Tax benefit: Premium eligible under Section 80C
The BTID Strategy: Buy Term, Invest the Difference
Here's the winning formula:
- 1Buy a pure term insurance plan (₹1 Cr cover ≈ ₹12,000/year)
- 2Calculate how much you'd pay for a ULIP (say ₹1,20,000/year)
- 3Invest the difference (₹1,20,000 - ₹12,000 = ₹1,08,000) in mutual funds
BTID vs ULIP: 20-Year Comparison
ULIP (₹10K/month)
₹35-45 Lakh
Cover: ₹15-20 Lakh
BTID Strategy
₹80-90 Lakh
Cover: ₹1 Crore
*Assuming 12% returns on equity MF, 6% on ULIP after charges
How Much Cover Do You Need?
A good rule of thumb: 10-15 times your annual income. But the exact amount depends on:
- →Outstanding loans (home loan, car loan)
- →Number of dependents
- →Children's education and marriage expenses
- →Spouse's earning capacity
- →Existing investments and assets
📌 Key Takeaways
- ✓Never mix insurance with investment
- ✓Buy pure term insurance for protection
- ✓Invest separately in mutual funds for wealth creation
- ✓Get cover = 10-15x annual income
- ✓Buy term insurance early—premiums increase with age
Need Help Choosing the Right Plan?
As IRDA certified advisors, we help you compare term plans across insurers, understand claim settlement ratios, and choose the right coverage. No commission pressure—just honest advice.