# Term vs Whole Life Insurance in India: What Should You Actually Buy?

*By Utkarsh Agrawal · 6 min read*

If an agent ever told you "insurance is also an investment," they were selling commission, not advice.

## Term insurance
Small annual premium → if you die during the term, family gets sum assured. If you outlive, you get nothing — that's the point.

Healthy 30-year-old non-smoker: ₹1 Cr cover for under ₹10,000/year.

## Whole life / endowment / ULIPs
Large premium → tiny cover (usually 10× annual premium) + the rest "invested" with heavy charges and lock-ins.

Typical 20-year return: **4–6% IRR**. Flexi-cap MF over same period: 11–13%.

## The 3-step framework
1. **Buy adequate term cover** — 15–20× annual income + loans + dependents' goals
2. **Build wealth via equity MF SIPs** — redirect the "endowment savings"
3. **Add health insurance** — family floater, separate product

## Return-of-premium plans?
You pay 2–3× pure-term premium to get your own money back without interest. Pure term + the difference invested in MFs beats it every time.

## Honest exception
Whole life can make sense for HNIs as estate planning. For 99% of retail: **pure term + mutual funds wins.**