The moment we hear the word insurance, our mind shuts down. It feels complicated, too technical, and something we’d rather avoid. And yet, the minute we start earning, everyone wants to sell us a policy: agents, colleagues, random calls, that relative or a family friend. It gets overwhelming very quickly. Here’s a simple breakdown of what young or early earners actually need. Nothing extra, nothing fancy, just the basics that matter.
Term life Insurance: A policy where you pay a yearly premium, and in return, your family receives the full sum assured if you pass away within the chosen term. No investment component, only coverage. If you have people who depend on your income (parents, siblings, or a spouse), you need this. Not those fancy plans that promise returns or maturity benefits. Just plain, simple Term Insurance. Here’s a practical rule: get coverage worth 10 times your annual income. If you earn Rs. 6 lakh per year, aim for a Rs. 60 lakh cover. This ensures that if something happens to you, your family has enough money to maintain the lifestyle for several years. Term insurance is incredibly cheaper when you’re young and healthy. A 25-year-old can get Rs. 1 crore coverage for around Rs. 8,000–10,000 per year. The same coverage will cost much more if you wait. Avoid investment-linked plans or endowment policies. Keep insurance and investment separate.
Health Insurance: A policy that covers your medical expenses, such as hospitalization, surgeries, treatments, and sometimes outpatient care, in exchange for a yearly premium. This is the most important insurance you’ll ever buy. Medical costs in India have skyrocketed. A simple hospitalization can cost Rs. 1–2 lakh, and serious illnesses can wipe out years of savings. Start with at least Rs. 5 lakh coverage. Even if your company provides health insurance, don’t rely on that alone. Company insurance ends when you leave the job. Health insurance premiums also increase with age. Buy it while you’re young and healthy.
What about other Insurance? If you own a vehicle, motor insurance is mandatory by law. Beyond the basic third-party insurance, consider comprehensive coverage if your vehicle is new. Everything else like travel, gadget, random add-on covers, you don’t need them right now.
And if you ever feel confused or unsure where to start, you’re not alone. Download Moneybar on platstore/appstore and sign up. A community exists, ready to learn, ask, share, and help make financial decisions without fear or confusion. Simple, relatable, made for us, and made by us.
Start small. Start early. Your future self will be grateful.
Paweii Kayina founder@moneybar.in
Thursday, March 12, 2026