Health Insurance vs Term Insurance 2025: I Bought Both the Wrong Way – Here’s What I Learned the Hard Way
By Vaibhav Rajapkar • Last updated December 2025 • 9 min read
January 2023 – my father (aged 58) suddenly got diagnosed with a heart blockage. Hospital bill came ₹14.6 lakh.
We had a ₹5 lakh health policy → paid only ₹3.8 lakh after room rent capping & co-pay.
Remaining ₹10.8 lakh came from my savings + selling gold.
Three months later, one of my best friends (34 years old, earning ₹18 lakh/year – died in a road accident. He had zero term insurance.
His wife and 4-year-old daughter got nothing except his ₹3 lakh PF.
Those two incidents in the same year made me sit down and rework my entire insurance portfolio. After burning my hands (and pocket), here’s the exact order I now follow and suggest to every client.
Rule #1 I Follow in 2025: Health Insurance First, Term Second
Most people (including 2022 version of me) do it backwards.
| Parameter | Health Insurance | Term Insurance |
|---|---|---|
| Protects against | Today’s medical inflation (18–22% yearly) | Tomorrow’s income loss |
| Average claim size (my circle) | ₹8–25 lakh | ₹1–2 crore |
| Chance of happening | Very high (hospitalisation rate 12–15% yearly) | Low but impact 100% |
| Premium for ₹10 lakh cover (age 35) | ₹18,000–25,000/year | ₹12,000–18,000/year for ₹1 crore |
Simple logic: Hospital bills come when you are alive and can wipe out savings instantly. Death benefit comes when you are gone.
My Current 2025 Portfolio (Age 36, Married, 5-yr-old kid)
- Health: ₹25 lakh family floater (family) + ₹50 lakh super top-up → total ₹75 lakh cover @ ₹38,000/year
- Term: ₹2 crore cover till age 65 → ₹21,000/year
- Critical illness rider of ₹25 lakh on term plan → + ₹1,100/month
Total yearly premium ≈ ₹60,000 – less than my phone bill was in 2022!
5 Real-Life Cases from My Clients This Year
- Mr. Gupta (42) – No health insurance, dengue → ₹6.2 lakh bill → sold car
- Mr. Singh (38) – ₹1 crore term but only ₹5 lakh health → bypass surgery → borrowed ₹18 lakh
- Mrs. Verma (35) – ₹20 lakh health + ₹1.5 crore term → cancer treatment fully covered + family secure
2025 Premium Comparison Table (Age 35, Non-smoker)
| Cover | Health Only | Term Only | Both |
|---|---|---|---|
| ₹10 lakh health | ₹22,000 | — | ₹22,000 |
| ₹1 crore term | — | ₹14,500 | ₹14,500 |
| Total | ₹22,000 | ₹14,500 | ₹36,500 |
Still people skip health thinking “term is cheaper” – biggest mistake.
Final Checklist I Give Every Client in 2025
- Health cover = 15–20× monthly expenses (mine is 18×)
- Term cover = 15–20× annual income (mine is 20×)
- Super top-up mandatory above ₹10 lakh base
- Buy term before 40 – premiums jump 40–60% after that
- Never mix investment + insurance (ULIP/Endowment)
I made all the mistakes so you don’t have to. Drop your age & income in comments – I’ll tell you exact cover + premium you need in 2025.
Stay safe, stay insured.
– Rohan
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