Your Cheapest Insurance Bet Might Be Your Biggest Mistake
One of my cousins in mid-twenties told me he has structured his insurance for himself. I was impressed on hearing it, unless he explained it fully. Personal accident cover, one crore, just ₹4,000 a year. Term insurance for the same amount? Forty thousand plus. He said I am young, accidents are the main risk anyway, why pay ten times more?
Possibly his logic was not wrong. It was incomplete.
Here's the thing to know, Personal accident cover only pays if death happens due to an accident. Term insurance pays regardless of the cause. Statistically 74% of deaths among young adults have nothing to do with accidents - illness, other causes, things nobody plans for.
Another key angle to it. Term insurance is easiest and cheapest to get when you are young and healthy. Develop diabetes or a heart condition at 35, and insurers may charge you significantly more or simply decline you altogether.
He bought the term plan, kept accident cover too. This combination is actually the right structure as the foundation, the other as a supplement.
Anyway, something worth passing on if you know someone in their twenties, thinking of taking a decision on What & Why over this?
Rahul Karandikar
After two decades in technology, Rahul now works with individuals and families who want to think about money with clarity, patience, and a long-term perspective.
