This is the truth few care to confront: every investment plan is meaningless if life itself remains uninsured.Before wealth creation, before SIPs, stocks or property, there must be absolute protection
through term and health insurance,” opined Sumit Rai, MD & CEO of Edelweiss Life insurance on the latest podcast episode of Simple Hai! “This is not financial advice—it is financial survival. Buy early and premiums fall, coverage widens, and critical illness ceases to be a catastrophe. Ignore it, and one medical emergency can dismantle decades of discipline,” Rai told Simple Hai’s Editorin-Chief Vivek Law. India’s sandwich generation already bears the weight of ageing parents and costly aspirations for children, strained further by longer lifespans, relentless healthcare inflation and soaring education costs.
The tragedy lies in a flawed understanding of Human Life Value: insurance is dismissed as wasted money precisely because it works only when disaster strikes—and when it does, nothing else matters more. A hard truth. The episode opened with a clear, almost uncomfortable assertion: before you think of SIPs, stocks or any other investments, you must first secure Term Insurance and Health Insurance. Not as an option, but as a foundation. Rai underscored the importance of critical illness coverage and the advantages of buying insurance early in life. The logic is simple: premiums are lower, medical complications are fewer, and coverage is more comprehensive.
Yet, despite this clarity, adoption remains poor—a paradox the episode repeatedly returns to. Rai’s research highlights the growing pressure on India’s “sandwich generation”, which, according to him, are those who support aging parents while funding increasingly expensive aspirations for children. Longer life spans, rising healthcare costs, and education inflation are creating financial and mental strain. Compounding this is what Rai calls the curse of liquidity. SIPs are started enthusiastically and stopped within months. Longterm products are avoided. Quick gratification from trading, crypto, lifestyle upgrades is often winning over patience.
The irony, he noted, is that impatience itself is expensive. The fundamental issue is poor understanding of human life and its immeasurable value. People struggle with the idea of paying premiums for decades without receiving anything back if they survive. Insurance feels like “wasted money” because its value lies in protection, not returns. Indians believe in savings, because savings assume survival. But people avoid planning for death or disability. This gap, Rai believes, reflects weak financial education rather than distributor apathy, though low commissions don’t help.
GST relief
Despite nearly 60% of Indians being “covered” in some form, most are severely under-insured. Many young professionals rely entirely on employer-provided group cover, ignoring the fact that a job change or layoff can erase that safety net overnight. Rai offered a simple thumb rule: term cover should be at least 10 times annual income. For instance a Rs 10 lakh salary calls for a Rs 1 crore cover which has to be reviewed every 3-4 years as income grows. On health insurance, he warned that Rs 2-3 lakh policies are no longer realistic in an era of expensive surgeries and long hospital stays. Buying early matters not for compounding, but for certainty. Premiums rise sharply with age, and health conditions can lead to heavy loading or outright rejection. A policy bought at age 25 can cost more than double if purchased at 35. Recent GST concessions on term and health insurance could help revive interest. Savings can either reduce cost or significantly increase coverage, a rare win-win.
COVID-19
The conversation then shifted to the seismic impact of COVID-19. For the first time in decades, mortality became visible in young and old alike. Families witnessed not just death, but the financial chaos that followed. According to Rai, the pandemic triggered two realizations. First, the myth that death only comes in old age collapsed. Second, people understood that income itself is fragile. This led to a surge in demand for term insurance, health cover, and income-guarantee products through 2021. But the momentum didn’t last. While awareness remains higher than pre-COVID levels, urgency has faded. Term insurance penetration, still sits at just 4–6% which is far below what a country like India needs.
Clarity over convention
Rai’s own career path offers a powerful counter-narrative to India’s obsession with linear success. With nearly 30 years of experience, largely in insurance and earlier in banking, his academic background is anything but conventional. After studying Liberal Arts at Allahabad University, he went on to pursue an MBA. For Law, this journey is particularly inspiring because it challenges the idea that only engineers or commerce graduates can rise to leadership roles in India’s aspirational economy. Success is not about academic labels. It is about clarity of purpose and sustained effort. Interestingly, although Rai entered finance through sales, despite being introverted in his youth, he found joy in the work.
His reflection is disarming: life is rarely as planned as people imagine. Progress comes from staying in motion, showing up consistently, and remaining open to where effort takes you. Morning exercise, nightly reading, and digital boundaries aren’t hacks, they are choices. Insurance is not about fear. It is about responsibility, to yourself, and to those who depend on you.
