All articles/Protection/20 October 2026/7 min
Do you need term insurance at 23?
When a pure term plan belongs in a first-job budget in India, and when health cover and a cash buffer come first.
Term insurance pays a lump sum if you die during the policy term. That is the product. If the pitch includes a maturity value, a pension, or “returns”, you are being shown something else, usually more expensive for the cover you actually need.
Who it is for
It is for people who would leave a gap if their income stopped. A parent whose rent you pay. A sibling whose fees you pay. A partner who shares a loan. If your death would not create a bill someone else cannot pay, you can wait. Being 23 is not itself a reason to buy, and it is not a reason to refuse. Dependence is the reason.
Employer cover, if you have it, usually ends when you resign. It is a benefit of the job, not a plan. Many people leave it out of the “cover I already have” box for that reason.
Health insurance is not a substitute. A hospital bill is a bill you might have to pay while you are alive. Term insurance does not pay it. If you have to choose and nobody depends on your income, choose health cover and the emergency fund.
How much cover, roughly
A common rule of thumb is 10 to 20 times annual income, often 15. It is a thumb, not a regulation. The estimator applies that multiple and then shows a wide planning range for the premium. The range is not a quote. Insurers price age, health, tobacco, term, and their own table. Two quotes for the same person can differ by a lot.
Buy the cover you can keep paying for the whole term. A large policy you lapse in year four protected no one.
What to compare, and what to refuse
Compare the claim-settlement record, the term, the exclusions, and whether the premium stays level. Refuse a bundle that adds a ULIP or an endowment so the agent can say you “get something back”. You get something back by not overpaying for cover you could have bought cleanly. The buying guide is the checklist for that conversation.
One tax note, because someone will mention it. As of October 2026 the new tax regime is the default, and the old deduction people still call 80C is not available in it. Do not buy a policy to save tax until you know which regime you are actually on. Buy it because someone needs the cover.
Educational, not financial, tax, or insurance advice. Figures were checked in October 2026. Confirm anything that changes a tax return or a policy before you act.