You got your first real salary, and within a month an "uncle" who sells insurance, or a bank relationship manager, is explaining why you must buy a policy right now to save tax. The plan he's pushing returns your money with bonus, doubles as investment, and saves tax — sounds perfect. What he doesn't say is that the same plan pays him a fat commission, locks your money for years, and gives you a tiny life cover. Term insurance, the thing you probably actually need, barely came up because it earns him almost nothing. This blog is about fixing exactly that — what's really being sold to you, what you actually need at 24, and how to tell the difference.
Why nobody sells you term insurance first
Here's the uncomfortable root of it. An insurance agent's income is commission, and not all products pay the same. A pure protection plan — term insurance — has the lowest premium of any life cover, which means the lowest commission for whoever sells it. A ULIP or an endowment plan costs you far more each year, so it pays the agent far more. Guess which one lands in your WhatsApp.
This isn't a conspiracy; it's just incentives. One major insurer's own guide openly admits agents avoid term plans because the commission is small. So the very product financial planners call the most important life cover is the one you have to ask for by name, because nobody volunteers it. Understanding term insurance starts with understanding why it's the thing being hidden from you.
The other half of the trick is the word "investment." You're told insurance should "give returns," so a plan that only pays out if you die feels like a waste. But mixing insurance and investment in one product is exactly what makes ULIPs and endowments expensive and underwhelming at both jobs — mediocre cover and mediocre returns, with high charges in between.
What term insurance actually is
Strip away the sales gloss and it's simple. Term insurance is pure life cover: you pay a small annual premium, and if you die during the policy period, your family gets a large lump sum. If you survive the term, you get nothing back — and that "nothing back" is precisely why it's cheap and why agents dislike it.
The numbers make the case. A healthy 25-year-old can often get ₹1 crore of cover for somewhere around ₹10,000–₹15,000 a year. Compare that to an endowment or ULIP where a similar premium might buy you a life cover of just ₹5–10 lakh, with the rest going into investment and charges. For protecting your family, term insurance gives you roughly ten times the cover per rupee. That gap is the entire point.
And here's a bonus most people missed: the government scrapped the 18% GST on term insurance in late 2025, so term premiums actually dropped. The cheapest serious life cover in India just got cheaper, right when the products competing for your money got no such break.
The tax-saving pitch that no longer works
This is the part that should make you angry, because it's the line most often used to close the sale. "Buy this and save tax under 80C." For decades that worked. In 2026, for most freshers, it quietly doesn't.
The new tax regime is now the default, and under it the Section 80C deduction — the ₹1.5 lakh that life insurance premiums used to claim — simply isn't available. You only get that benefit if you actively choose the old regime. So a 23-year-old sitting on the default new regime who buys an endowment plan "to save tax" gets exactly zero tax benefit for it. The pitch is stale, but agents keep using it because most buyers don't know the rule changed. Before anyone sells you term insurance or anything else "for tax," ask which regime you're even on.
If you do happen to be on the old regime, term insurance premiums still qualify under 80C and health riders under 80D. But choosing a product purely to chase a deduction you may not even be eligible for is how people end up stuck in policies they never needed.
The "return of premium" trap to watch for
When you do ask for term insurance, the agent has a fallback move: the "return of premium" version, often sold as TROP. The pitch sounds clever — "take a term plan, but if you survive, you get all your premiums back, so it's never wasted." It feels like winning both ways.
Run the maths and it falls apart. A return-of-premium term insurance plan costs roughly double the premium of a plain one for the same cover. That extra money, if you'd instead put it in a basic index fund over twenty years, would grow to far more than the premiums they "return" to you with no interest. You're essentially giving the insurer an interest-free loan for two decades so they can hand your own money back and call it a benefit. Plain term insurance plus investing the difference beats it almost every time. The "wasted premium" feeling is real, but the cure isn't a costlier policy — it's understanding that protection and returns are two different jobs.
What you actually need at 24
So what should a first-job earner buy? The honest answer is usually short. First, ask whether you even need life insurance yet — if nobody depends on your income, you may not. The whole point of a death payout is replacing income your family relies on. A single 23-year-old with no dependents and no loans often needs no life cover at all, and can skip the entire pitch.
If people do depend on you — parents, a loan you don't want passed on, a spouse — then term insurance is the answer, sized at roughly ten to fifteen times your annual income. Separately, get health insurance, because your employer's group cover vanishes the day you leave the job, and a hospital bill is far likelier than an early death. Keep insurance and investment apart: a term plan for protection, and a simple SIP or index fund for growth. That separation alone beats almost every "combo" product an agent will show you.
This is where a few honest minutes saves you years. The challenge is usually that the agent in front of you sounds confident and you've nothing to check him against. Platforms like eSalahKaar let you talk to working professionals at per-minute pricing, so you pay only for the few minutes it takes to ask "an agent's pushing me this ULIP, do I actually need it?" Worth bookmarking before you sign any policy. You can see how the per-minute setup works on their how it works page, and the FAQ clears the common doubts first.
Other honest ways to decide
A conversation is one route. Here are the others, with their trade-offs.
Other ways to approach this:
1. Read the regulator, not the seller. The official site of the insurance regulator, IRDAI, explains policy types and your rights as a buyer with no product to push. Dry but neutral — the opposite of an agent's brochure. Free and worth thirty minutes before you commit.
2. Compare term plans on an aggregator. Sites that line up term insurance quotes from multiple insurers let you see real premiums side by side. Useful for price discovery. The catch: they earn commissions too, so treat their "recommended" tags with mild suspicion and focus on the raw numbers.
3. Use a fee-only financial advisor. Unlike commission agents, a SEBI-registered fee-only planner charges you a flat fee and has no incentive to sell you a costly product. Costs a few thousand rupees but removes the conflict of interest entirely. Overkill for a simple term plan, valuable once your money gets complicated.
4. Ask a senior who already sorted this. A colleague a few years ahead who bought term plus health and skipped the ULIP can tell you exactly what they'd do differently. Free and specific, limited to who you know.
Each has a trade-off. The regulator is neutral but dense. Aggregators are quick but commissioned. A fee advisor is unbiased but costs money. And a senior is honest but only one data point.
The honest bottom line
Most freshers are sold the wrong product for the wrong reason — an expensive combo plan, justified by a tax break they no longer qualify for. The real risk isn't dying uninsured at 24; it's locking your early savings into a low-cover, high-charge policy you'll regret in five years. Before you buy anything, ask three questions: does anyone depend on my income, am I on the old or new tax regime, and is this term insurance or an investment product wearing a costume? Those three answers settle most of it.
If an agent is pitching you right now — what exactly is the plan called, and what's the annual premium versus the life cover? For most of these products the cover is shockingly small. Check that one ratio, and the right choice usually becomes obvious.