Which Should You Start First: SIP, Term Insurance, or Health Insurance?
Samreen, a 28 year old software engineer living in Chennai, was excited about her growing career. With a good salary and some savings in her bank account, she felt ready to make smart financial decisions. Like many young professionals, she had heard a lot about investing in mutual funds through SIPs (Systematic Investment Plans) and was eager to start one. After all, SIPs are often recommended as a simple way to build wealth gradually.
One evening, while chatting with a close friend, the topic of insurance came up. Her friend said,
“Samreen, do you have any health insurance or term insurance? I recently had to rush my dad to the hospital, and the bills were huge. Insurance really helped us.”
Samreen paused. She realized she hadn’t thought much about insurance. Her focus had only been on saving and investing. She asked herself,
“Do I really need insurance now? I’m young and healthy.”
But the thought stayed with her. What if something unexpected happened? What if she had a medical emergency or an accident? Would her savings be enough? And what about her parents who depended on her?
Feeling unsure, Samreen reached out to me for advice.
When we met, I asked her a few questions:
“Samreen, if you had a medical emergency tomorrow, do you know how much it might cost?”
She thought for a moment and said,
“Maybe a few thousand rupees?”
I smiled and shared some facts.
“Medical expenses in India have been rising quickly. A hospital stay can easily cost ₹50,000 to ₹5 lakhs or more, depending on the treatment. Without health insurance, you might have to dip into your savings or take loans. It can ruin your financial future before you even realize it.”
Next, I asked,
“Do you have anyone financially dependent on you?”
Samreen said,
“Yes, my parents live with me and depend on my income.”
I explained,
“Term insurance is essential in such cases. It provides your family with financial support if something happens to you. And here’s a good thing — the younger and healthier you are, the cheaper the premium. For example, a ₹1 crore term insurance plan can cost less than ₹1,000 per month if you buy it in your 20s.”
She nodded, beginning to understand.
Finally, I said,
“Now, what about your investment plans?”
She smiled,
“I want to start a SIP to build wealth for the future.”
I replied,
“That’s great. But think of your financial planning like building a house. You don’t start painting walls before the roof is fixed, right? First, you build the foundation with protection — health and term insurance. Once you are secure, then you can start growing your wealth through SIPs and other investments.”
Samreen took the advice seriously. That week, she purchased a health insurance policy with ₹5 lakhs coverage, along with a top-up plan for extra protection. She also signed up for a ₹1 crore term insurance policy, affordable and giving her peace of mind. Only then did she start a monthly SIP of ₹5,000 in a well-researched mutual fund.
A few weeks later, she messaged me,
“I’m so glad I spoke to you. Now I feel safe and confident about my financial future. I’m protected against emergencies and also growing my money wisely.”
If you relate to Samreen and wonder where to start whether SIP, term insurance, or health insurance here is a simple plan to follow:
- Start with Health Insurance: Protect yourself against high medical costs.
- Buy Term Insurance: Secure your family’s future in case of any unforeseen event.
- Begin Investing via SIP: Grow your wealth steadily for long-term goals.
Remember, protection comes first, then growth.
If you feel confused or want a clear, personalized financial plan, I’m here to help. You can contact me for a free consultation to understand your financial goals better and build a plan that fits your life and dreams.
Drop your questions in the comments or reach out to me for a quick one-on-one consultation. Let’s secure your future smartly and simply.
I'm happy to assist you with:
- Personal insurance advice
- Help comparing policies
- Investing in Mutual Funds
- Answering any doubts or concerns
Feel free to reach out with any queries!
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