Rich Enough to Skip Insurance? 3 Tests First

Having good savings feels like enough protection — but insurance and savings solve different problems. Before you cancel any policy, run these three checks to make sure your family is truly covered.

Here's what happened: Insurance replaces your future income — savings only cover what you've already earned and accumulated so far.. Most Indian families carry 20–30 year home loan EMIs that savings alone cannot fully absorb if the earner dies early.. Health insurance protects your existing wealth — one major surgery or ICU stay can cost ₹5–15 lakh and wipe out years of savings..

What you should do: Calculate your 'self-insurance number': add all outstanding loans + 10 years of household expenses + all remaining financial goals — if your liquid assets don't cover this total, keep your term policy active.. Check if your health cover is employer-provided — if yes, buy a separate personal health policy immediately because employer cover ends the day you resign or retire.. Review your term insurance every 3–5 years: as loans get paid off and savings grow, you can reduce the cover amount instead of cancelling entirely — this cuts your premium without leaving your family exposed..

You can technically self-insure on life cover once your net worth exceeds 25–30x your annual household expenses AND all major loans are cleared — until then, a term plan is non-negotiable.