Term life insurance a cornerstone of financial security, not just a tax -saving tool | Mint

In India, life insurance is often misunderstood as merely a tax -saving tool, taking into account the benefits in terms of sections 80c and 10 (10D) of the Income Tax Act. Although these deductions to £ 1.5 lakh are compelling on premiums and tax-free benefits, they should not deduce from the real purpose of term insurance: long-term financial protection for families. Financial planning in India has been skewed for investment -led instruments for too long. Life insurance is usually combined with savings -oriented products such as ulip’s and endowment plans, which promote the idea of ​​wealth creation rather than risk protection. This mindset has driven term insurance-the most cost-effective and purposeful form of life cover to the sideline. As a result, a majority of Indian households remain financially vulnerable. For families dependent on a single income, the sudden loss of a breadwinner can lead to severe financial distress. Routine issues such as EMIs, school fees, medical bills and daily necessities can quickly become overwhelming. To put it in context, the economic survey 2023-24 penns India’s revenue per capita at £ 2.12 lakh per year. Consider a middle-income household: Home loan emis & rental: housing costs in metropolitan cities such as Mumbai and Bangalore range from £ 3,00,000- £ 7,00,000 per year, while even in Tier-2 cities, rental costs can be just as high as £ 3,00,000 annually. Children’s education: Private school fees can range from £ 50,000 to £ 3,00,000 per child annually, with higher education costs in various lakhs. Daily living costs: Groceries, aid programs and transport for a family of four can cost up to £ 12.00,000 annually. Healthcare costs: Routine Medical Expenses and Emergency Health Care can add another £ 60,000 annually. Business and professional expenses: For independent individuals, business-related costs such as office rent, salaries of employees and loan further contribute to financial obligations. These are real numbers, based on market recordings and everyday realities. Without a financial safety net such as term insurance, such households are one crisis away from the loss of their stability. An important problem is not only low insurance coverage, but also under -insurance. According to the National Insurance Academy, India’s gap for insurance protection stands at 90%. Many individuals choose low cover amounts to keep premiums minimal, and accidentally defeat the purpose of life insurance. Ideally, you should opt for an amount ensuring that it is 10 to 15 times their annual income, while the existing obligations are taken into account. For example, someone who earns £ 10 lakh annually should have a term of at least £ 1-1.5 crore. Anything less depends on the risk of long -term financial tension. Although these gaps are coming, there is good news. The rise of digital insurance platforms made term plans more accessible, transparent and affordable than ever. At Phoneepe, we use technology to reform how India approaches the life cover. Here is how we make it easier for families to protect their future: Pre-approved offers that reduce the release time and facilitate easy decision-making zero cost insurance-what you pay is what you pay, no hidden fees up to 15% discount on monthly and annual premium options, so you can choose what your cash flow helps to help a relationship manager Claim Support. We are committed to building confidence through unbiased advice, seamless digital trips and consistent support to the sale. Our platform collects top-rated insurers, giving users a clear comparison between brands and benefits. While India jointly moves to the Irdai’s vision of ‘insurance for everyone by 2047’, it’s time we move the narrative. Term insurance is not just a marker for tax season – it is a cornerstone of responsible financial planning. At Phoneepe, our mission is to demystify the insurance, bridge India’s protection gap and empower every Indian household with simple, powerful and reliable life solutions. Because true financial security does not come from returns, it comes from reassurance. Note for readers: This article is part of Mint’s Paid Consumer Connect initiative. Mint accepts no editorial involvement or responsibility for errors, omissions or accuracy of content. Do you want to story as displayed above? Click here! First published: 21 Apr 2025, 07:22 PM IST