Best Insurance Plans in India: What to Buy First

On health cover amounts: a Rs 5 lakh base policy is thin in a metro, where a single serious hospitalisation can exceed it. The efficient structure is a base policy plus a super top-up, which covers costs above a chosen threshold at a much lower premium than raising the base sum insured. A Rs 5 lakh base with a Rs 20 lakh super top-up above Rs 5 lakh usually costs less than a Rs 25 lakh base policy.

Personal accident cover is the cheapest useful policy most people never buy. It pays on death and, more importantly, on permanent disability - the scenario where income stops but expenses do not. For a sole earner or a daily commuter, it is worth the small premium.

Motor insurance is mandatory for third-party cover. The decision is on own-damage: check the insured declared value, the add-ons that actually matter - zero depreciation, engine protection in flood-prone cities - and the claim settlement record rather than the premium alone.

The mistake to avoid is bundling insurance with investment. Endowment policies and ULIPs pay commissions that pure term does not, which is why they are recommended far more often than the outcomes justify. Buy term for the cover and invest the difference separately.

Before buying: 1. Disclose health history and habits fully - a rejected claim defeats the entire purpose. 2. Check the claim settlement ratio and, more usefully, the complaint volume. 3. Read what is excluded, especially waiting periods for pre-existing conditions. 4. Buy young if you can; premiums are set by entry age and never reset.