Ritesh Sabharwal CFP®

W.M.W #3: How I Fixed a ₹1.5Cr Insurance Gap for Just - ₹1,294/month extra

Reading time: 3 minutes - July 5, 2025

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Hey Reader

Does insurance feel confusing or overwhelming? You’re not alone. For many of us, it's like a maze that has many missing pieces.

After speaking with hundreds of professionals in my workshops and network, I realized this isn’t a rare story. Many of us are sold expensive policies that leave our families under-protected.

Today, I want to help you build a simple, bulletproof insurance framework that actually works when you need it.

What’s Inside This Issue

• The “Insurance Audit Framework” to reveal your real coverage needs
• Why traditional insurance planning often fails most professionals
• The exact method I use to evaluate insurance policies

Let’s get started on protecting what matters most.

3 Steps to Protect Your Life and Health (Even If You’re Starting Late)

Building a strong insurance foundation isn’t about spending more. It’s about getting the right coverage that truly protects you and your loved ones.

1. The Coverage Calculator

Start with the 20x rule: multiply your annual income by 20. But don’t stop there—add your loans, children’s education, and parents’ medical needs.

Example:

My friend aged 31 years earn ₹15 lakhs a year. His monthly expenses are ₹1 lakh and he has an outstanding home loan of ₹2Cr. Basis the 20x rule, he will require at least ₹3 Cr in term cover however this does not include his home loan liabilities.

When I look through his details, his required Insurance cover comes out to ~₹4.5Cr.

He thought he only needed ₹3Cr for which he was paying a premium of ₹35,304 per year or ₹2,942 per month.

I fixed his additional ₹1.5Cr Insurance gap with a pure term plan for just ₹1,294/month extra.

P.S - Am sure you want to calculate this for yourself, don't worry - I've create a simple calculator that you can use to get your required cover. Download it - HERE

Pro tip: If you have additional liabilities then just add them to the life cover amount.

2. The Three-Layer Protection System

Picture insurance as a pyramid:

• Base: Health insurance for your family (at least ₹20-40 lakhs)*
• Middle: Term insurance (income replacement, as per your coverage calculator)
• Top: Critical illness cover (₹50 lakhs for specific risks)

It's not just one type of insurance, you must protect your life as well as your health.

3. Choosing the right policies

So, now you know that you need a Life cover, Health cover and some critical illness cover.

You also know an estimate of how much cover you need.

Now, you have to choose the right policies for both the covers.

You can use many sites like policybazaar, joinditto and others to compare the policies, look at the critical features you definitely need and thereafter choose the right policy.

Quick Recap

• Calculate your real life insurance needs using the calculator
• Build a three-layer protection system
• Choose the right policies

Sneak Peek👇

Next week I will tell you about “Did You Forget to Update Your NPS Limit?”

So stay tuned!!

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