Insurance as a product
What are you actually buying, what does it cost, and which clause decides your claim?
7 of 7 chapters published
Chapters
Beginner
- What insurance is for and is notInsurance transfers a loss you could not absorb to someone who can. That single purpose decides what to insure, what to leave alone, and why the products that also invest your money tend to do both jobs badly.
- Term, the only pure insuranceTerm cover pays only if you die within the term and returns nothing if you do not. That is not a defect — it is why almost the whole premium buys protection, and why the cover is a multiple of what any bundled product offers.
- Endowment and money-back, and the return insideThese pay a maturity amount whether you live or die, which sounds like better value and is paid for twice — in a smaller sum assured and in a return you are never shown as a rate.
Intermediate
- ULIPs, charges namedA unit-linked plan is a mutual fund inside an insurance contract. Every charge has a name, and IRDAI requires the seller to hand you a document stating the reduction in yield those charges cause — which almost nobody reads.
- Health cover, the clauses that decide claimsThe sum insured is the number people compare and the clauses are what decide whether you are paid. Waiting periods, the moratorium, sub-limits and room rent matter more than the headline cover.
Advanced
- Working out the return on a policy you holdThe method for the question nobody answers for you. Build the cash flows, solve for the rate, value the cover separately — and then decide whether to continue, make it paid-up, or surrender.
- Insurance and tax after the 2025 ActThe last chapter of the subject. Tax treatment is a reason to prefer one wrapper over another and never a reason to buy a product — and since the 1961 Act was repealed, most of what you will read cites provisions that no longer exist.