“Do not go out when it’s raining without an umbrella” – Secrets of Insurance

  • Is Life Insurance a costly affair ?
  • Are people getting into long periods of commitment beyond their paying capacity ?
  • Is Insurance a burden ?
  • Is Insurance giving low return ?
  • Is Insurance a sickening affair ?

Not really. If at the time of buying, we give a serious thought about the various options available. “Buy term and invest the rest” is the slogan, outside India. In India, people are yet to give this concept a serious look.

A 45 year old male, can get a pure risk cover of Rs. 15,00,000/= at approximately Rs.12,500/= for a twenty year term. Insurance certainly is not a costly affair.Most of you may be paying half this amount every year to protect your glamourous four wheeler. Is your life less worthy than your car ?

There are quite a number of instances, where people book a flat to get into a liability of Rs.12,000/= every month for 20 years. Is our lives less worthy than a flat ?We need to check the answers with a young widow or a child who lost his/her father early in life.

A two wheeler rider with a helmet on his head is not a pessimist nor he is supposed to be expecting an accident while riding. He is called a smart guy.

A check list that needs to be looked at :

1) Upon getting the first employment, get a pure cover with maximum term (it could be 30 years) at that point of time. The amount of cover should be atleast 5 times that of your income. Review this as and when a) income goes upwards and b) after marriage / child birth
2) No point in covering the life till 100 years. Whole life cover is certainly not the best option. Concept of Insurance is to replace financial loss, in case of any unfortunate happening. Get a fair idea of how long the family is dependent on you, financially. Then decide the term of insurance
3) Beyond 35 years of age, cost of Insurance is high relatively speaking. Earlier the better
4) Look at the rider benefits available like a) Critical Illness b) Serious Illness c) Accidental Death Benefit d) Additional Sum Assured……
5) Choose Annual Premium payment mode than other options like quarterly / half yearly
6) Choose a reliable Insurer with good track record. Claim repudiation number is a good measure of credibility of the company and its agents
7) Reveal facts about your health. It is important to be faithful to a doctor, lawyer and TO THE INSURER
8) Stop treating insurance as an investment vehicle. It was not meant to be …

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