Must Have Insurance by 35: Your Starter Pack for Lifelong Protection

The age of 35 has emerged as a critical milestone for insurance planning. Waiting beyond this age not only increases the risk of policy rejection due to medical conditions but also leads to a significant escalation in premiums. Industry data shows that premiums for both term and health insurance can rise by 50–100 per cent when purchased after 35, compared to buying in the late 20s.

Why 35 Matters

Insurance premiums are priced on risk, which increases with age. A healthy 28-year-old non-smoker can secure a Rs 1-crore term life insurance policy for approximately Rs 10,000 annually. By 35, the same cover could cost Rs 18,000–Rs 20,000; at 40, it can touch Rs 30,000. Over a 25-year policy term, this difference translates into several lakhs of additional outflow.

Health insurance premiums follow a similar trajectory. A Rs 10-lakh family floater policy that costs Rs 20,000 annually for a 30-year-old rises to Rs 35,000–Rs 40,000 by age 40. The gap is sharper if pre-existing conditions like diabetes, hypertension, or thyroid issues are disclosed.

“By the time you hit 35, lifestyle diseases start showing up in medical tests. That means higher premiums, exclusions, or even rejection in some cases. Buying young locks in affordability and wider coverage,” says Sanjiv Bajaj, Jt. Chairman & MD, BajajCapital.

The Three-Starter Pack

Individuals under 35 should secure a basic set of three policies to protect their financial security:

1. Term Insurance (Rs 1–2 crore cover):
Provides financial protection for dependents in the event of untimely death. The rule of thumb is to opt for 10–15 times annual income. Early purchase ensures long-term affordability.

2. Health Insurance (Rs 10–15 lakh base + Super Top-Up):
With medical inflation running at 12–15 per cent annually, the earlier Rs 5 lakh base cover is no longer sufficient. A Rs 10–15 lakh base cover supplemented with a super top-up offers protection against both routine hospitalisations and major medical expenses.

3. Personal Accident Insurance (Rs 50 lakh–Rs 1 crore cover):
A frequently overlooked policy, this provides income protection in case of accidental disability or death. Given the rising incidence of road accidents and work-related travel, it serves as an essential component of risk management.

Together, this “starter pack” costs between Rs 25,000 and Rs 35,000 annually for a 30-year-old, but can rise to Rs 50,000 or more after 40.

The Economic Rationale

The logic of buying early goes beyond immediate savings. Securing insurance in the late 20s or early 30s frees up future income for wealth creation. Premiums remain locked at lower levels, allowing individuals to allocate a greater portion of their earnings towards investments such as equities, mutual funds, or retirement planning.

“Think of insurance as a risk-transfer tool. You offload the biggest financial uncertainties like illness, accidents, untimely death, so your savings can focus entirely on growth. Without that safety net, even the best investment plan can collapse,” Bajaj adds.

India’s Underinsurance Challenge

Despite the clear financial advantages, underinsurance remains a challenge in India. According to WHO estimates, out-of-pocket health expenditure accounts for nearly 48 per cent of total health spending in the country, one of the highest globally. At the same time, term insurance penetration remains below 5 per cent of the working population.

Rising awareness among younger consumers is improving adoption, but the tendency to delay purchase until later years persists. This trend exposes households to both medical and income risks during a life stage when financial responsibilities are at their peak.

The Takeaway

For Indians in their 20s and early 30s, the course of action is clear: secure your insurance starter pack before 35. The costs are manageable, coverage is wider, and the long-term financial benefits are substantial. Waiting not only increases premiums but also narrows options, leaving households vulnerable to medical, income, and protection gaps.

As Bajaj says, “Insurance is not about chasing returns, it's about buying peace of mind. It is the foundation of financial well-being, and the earlier you build it, the stronger your financial future will be.”