Why Every Person Needs Health Insurance and Term Insurance in India
FINANCE
In today’s unpredictable world, financial security is a priority for every individual, especially in a country like India, where healthcare costs are soaring and social safety nets are limited. As of May 15, 2025, health insurance and term insurance have become essential tools to safeguard against life’s uncertainties. Health insurance protects your savings from medical emergencies, while term insurance ensures your family’s financial stability in your absence. Let’s explore why these two plans are vital for most people in India.
The Necessity of Health Insurance
Healthcare costs in India are rising rapidly, with out-of-pocket expenses pushing around 55 million people into poverty annually, according to a 2024 WHO report. A single hospitalization for something like dengue or a minor surgery can cost ₹50,000 to ₹2 lakh, draining savings or forcing families into debt. Health insurance mitigates this risk by covering hospitalization, surgeries, and critical illnesses like cancer or heart disease. With lifestyle diseases on the rise—77 million Indians have diabetes, per ICMR 2024—and pollution-related ailments increasing, the likelihood of needing medical care is high, even for the young and healthy. A basic health insurance plan with ₹5 lakh coverage costs just ₹5,000-₹10,000 annually, making it an affordable shield against unforeseen expenses. Government schemes like Ayushman Bharat help, but they don’t cover all hospitals or expenses, leaving private health insurance as a critical necessity for most.
The Importance of Term Insurance
Term insurance is a must for anyone with financial dependents, such as a spouse, children, or aging parents. In India, where 70% of households depend on a single breadwinner (NSSO 2023), the sudden loss of that income can be catastrophic. A term insurance plan provides a lump sum to your family if you pass away during the policy term, ensuring they can maintain their lifestyle, pay off debts, or fund goals like education. For instance, a 30-year-old earning ₹10 lakh annually can secure a ₹1 crore cover for just ₹10,000-₹15,000 per year, replacing their income for 20-30 years. India’s life insurance penetration remains low at 3.2% in 2024 (IRDAI), leaving many families vulnerable, as highlighted by countless stories on X about financial struggles after untimely deaths. While not urgent for those without dependents, term insurance is still worth considering early, as premiums are cheaper at a younger age.
Why Both Are Essential for Most
Health insurance and term insurance address distinct risks, making them complementary for most individuals. Health insurance protects your finances from medical emergencies, preserving your savings, while term insurance secures your family’s future if you’re no longer there to provide. For a typical family person in their 30s, both are non-negotiable: health insurance ensures they don’t lose their savings to a sudden illness, and term insurance guarantees their dependents’ stability. Even for singles, health insurance is critical, and term insurance becomes relevant once they have dependents. Exceptions exist—high-net-worth individuals might self-insure for health costs—but for the average Indian, these plans offer unmatched security.
Conclusion
In a country like India, where healthcare and financial uncertainties loom large, health insurance and term insurance are foundational to a secure future. They protect against the dual risks of medical emergencies and untimely death, ensuring peace of mind for you and your loved ones. As of May 15, 2025, investing in both plans isn’t just a choice—it’s a necessity for most to navigate life’s unpredictability with confidence.