In his highly practical video “Don’t Buy Term Insurance without watching this,” Sanjay Kathuria explains why most people buy the wrong term insurance or pay too much for features they don’t even need.
If you’re thinking of buying term insurance, you absolutely need to know how to choose the right sum assured, avoid sales tricks, and save lakhs over your lifetime.
1. What is Term Insurance Really For?
Sanjay Kathuria starts by explaining the most important truth about term insurance:
It is not an investment. It’s financial protection.
- Term insurance is pure life cover.
- It pays your family a large sum if you die during the policy term.
- There is no maturity benefit if you survive.
He warns viewers not to confuse it with returns. The point is to ensure your family’s expenses are covered if you’re no longer there to provide.
2. How Much Cover Do You Really Need?
Sanjay shares a simple but powerful rule for deciding your sum assured:
- Minimum = 20 times your annual income.
- Add any existing loans or liabilities.
- Consider future goals like kids’ education or marriage.
Example:
- Annual income = ₹10 lakh.
- Recommended cover = ₹2 crore or more.
This ensures your family can maintain their lifestyle without financial stress if something happens to you.
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3. Biggest Mistakes People Make When Buying Term Insurance
Sanjay highlights the common mistakes that cost people money or leave families under-insured:
- Choosing too little cover to save on premiums.
- Buying expensive return of premium (ROP) plans.
- These plans refund premiums at the end but cost 2–3x more.
- Better to buy cheap pure term and invest the difference elsewhere.
- Relying only on employer insurance.
- Corporate cover ends if you leave the job.
- Always have your own personal policy.
- Not disclosing health issues honestly.
- Leads to claim rejection later.
He says being cheap about premiums today can destroy your family’s security tomorrow.
4. How to Choose the Best Term Insurance Policy
Sanjay Kathuria explains step-by-step how to choose wisely:
Claim Settlement Ratio (CSR):
- Choose insurers with 95%+ CSR.
- It’s the biggest indicator they will pay when needed.
Sum Assured Flexibility:
- Some policies allow increasing cover later.
- Helps you adjust for salary growth and inflation.
Premium Comparison:
- Don’t overpay for brand hype.
- Online term plans are cheaper and easy to buy.
Riders:
- Critical illness or accidental riders can be useful.
- Don’t buy unnecessary add-ons just because an agent pushes them.
Honest Declaration:
- Always share health conditions, habits (like smoking).
- Ensures claims aren’t rejected later.
Final Takeaway
Sanjay Kathuria’s message is clear: Don’t buy term insurance as an investment. Buy it as protection for your family.
Focus on getting the right sum assured, choosing a reliable insurer, and paying only for what you need. Don’t fall for sales gimmicks or flashy extras.
For expert insurance comparisons, investment strategies, and practical financial planning guides, visit Investment Marg. For broader personal finance tips and lifestyle advice, check InkSpireDaily.
FAQs:
Q1. Should I choose return of premium term plans?
No. They’re expensive for no real benefit. Buy pure term and invest the extra money yourself.
Q2. How much term insurance cover do I need?
Minimum 20x your annual income plus any debts and major future expenses.
Q3. Is online term insurance safe?
Yes! Online policies are cheaper, transparent, and directly from the insurer.
Q4. Can I have multiple term insurance policies?
Yes. It can be a good strategy to split large coverage across insurers.
Q5. At what age should I buy term insurance?
As early as possible. Premiums are lowest when you’re young and healthy.
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