Term insurance vs investment plans, which makes more sense?

Short answer
Term insurance makes more sense for most people. Investment plans try to do two jobs and usually do neither well.

What is Term Insurance

Term insurance is pure protection. You pay a low premium and get a high life cover. If something happens to you during the policy term, your family receives the payout. If nothing happens, there is no maturity value. Simple, clear, and focused. Paisa sirf protection ke liye hota hai.

What are Investment Plans

Investment plans combine insurance and investing. A part of your premium goes towards life cover, and the rest is invested. Returns are usually modest and not guaranteed. Charges are higher, and the structure is complicated. On paper, it looks attractive, but samajhna thoda tricky hota hai.

Which One Makes More Sense

If your main goal is to protect your family, term insurance is the best option. You get high coverage at a low cost. The money you save on premiums can be invested separately in better choices.

Investment plans make sense only if you want forced saving and do not want to manage investments yourself. But flexibility kam hoti hai, and returns are usually lower compared to doing insurance and investment separately.

Cost and Returns Reality

Term insurance gives no returns, but that is the point. It is meant to protect, not grow money. Investment plans promise maturity value, but after charges, real returns are often average. Long lock-in bhi hota hai, which reduces freedom.

A Smarter Approach

Buy term insurance for protection. Invest separately based on your goals and risk comfort. Isse clarity rehti hai and control bhi aapke haath mein hota hai.

Final Takeaway

Term insurance makes more sense for most Indians. Investment plans sound convenient, but combining goals usually reduces effectiveness. Protection aur investment ko alag rakho. Simple decisions long term mein better results dete hain.