Make life insurance count by taking the right policy at the right stage in life and for the right quantum of cover.
When it comes to life insurance, most Indians possess a policy because life insurance still turns out to be the first brush with financial instruments for many. But dig deeper on the quantum of cover and you may find the average sum assured to be a few lakhs at best, with many being grossly under insured. Although everyone knows that death is inevitable and that life insurance is a necessity to provide for financial dependents, people put off taking a policy or take one for the wrong reasons.
With these facts, when you meet Mumbai resident Vishal Paleja, 37, a father of two, you will be surprised to note his clear thinking with life insurance. “I chose a term cover, as my first priority is to secure my family,” he states. Paleja,who runs a garment business, explains that the type and amount of cover was arrived at after a need analysis, factoring in his work profile, responsibilities, goals and cost-benefit study. “There are endowment policies, but they have high premiums for a similar cover and do not meet my needs,” stresses the astute businessman. His protection cover comes at a cost of `18,000 a year.
Welcome to a situation where several Indians are embracing life insurance with a clear view of taking it as a protection than taking it as a savings and investment tool. “Take the cover at young age and when you are in good health, since you may not get the cover at later stage or might have to pay a hefty premium for pre-existing diseases such as hypertension or diabetes etc,” advises Mimi Partha Sarathy, managing director, Sinhasi Consultants. Yes, it does get expensive if you postpone the decision to take a life insurance policy beyond a certain age.
Size and type
This story is from the August 2017 edition of Outlook Money.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the August 2017 edition of Outlook Money.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
The Future Of Credit Card Usage
Credit card usage is increasing in India, but it's prudent to manage credit wisely
Liquidity Coverage Ratio Framework
At the recent monetary policy committee meeting in April 2024, Reserve Bank of India (RBI) Governor Shaktikanta Das proposed changes in the liquidity coverage ratio (LCR) framework to successfully meet liquidity risk.
STRATEGIES TO HELP YOU STAY ABROAD AFTER STUDIES
More Indians are now going abroad for higher studies with plans to stay and work. But living costs, the lack of job opportunities and the burden of education loans could often pose a problem. Assess the opportunities and be practical before making such a decision
FROM SAVINGS TO SECURITY: HOW INDIANS ARE PREPARING FOR THEIR SUNSET YEARS
The Outlook Money - Toluna Retirement Survey conducted in December-end 2023 threw light on how Indians plan and save for retirement. A growing number of Indians now understand the necessity of retirement planning, and want to enjoy their retirement years with kith and kin
Here's How To Install A Solar Panel
It is the season of solar panel subsidy announcements. Right after the Centre launched the PM Surya Ghar Muft Bijli Yojana to offer subsidies to 10 million households to set up rooftop solar systems, the Delhi government has announced an extra capital subsidy of ₹2,000 per kilowatt (kW) to Delhi residents for rooftop solar panel installation. Both governments have caps on subsidies. Some other states, too, offer incentives on the use of solar rooftop panels.
Master Your Own Money Choices
Instead of judging others, have clarity about what you want from your money, where you want to spend it and how you want to feel about it
3 THINGS TO CHECK BEFORE YOU EXIT YOUR POLICY
If you think that the insurance policy you bought doesn't quite align with your goals, you may surrender it. But that comes at a cost. Here's why you should do the calculations
Small And Mid Cap Rally: Be Wary
You may include small- and mid-caps in your portfolio for diversification, but understand that they may not replicate last year's returns and are relatively more volatile
HOW TO MAKE SENSE OF THE GOLD RUSH?
The precious metal has been on an upward rally for the last couple of years due to factors as diverse as geopolitical conflicts, bulk buying by central banks, and hope of rate cuts, of late. The key, therefore, is to invest in gold in a staggered manner
'People Are Normal. They Are Sometimes Ignorant But They Are Not Stupid'
Meir Statman, the Glenn Klimek Professor of Finance, Leavey School of Business, Santa Clara University, California, is the second generation of behavioural finance experts who refused to label people as \"irrational\" and instead called them \"normal\". In his latest book, A Wealth of Well-Being: A Holistic Approach to Behavioral Finance, he expands the circle of finance to include life well-being and shows how they are inextricably intertwined. As part of an interview series, 'Wealth Wizards: Money Maestros in conversation with Nidhi Sinha, Editor, Outlook Money', Statman spoke about his research, and explained concepts through anecdotes that can help you take balanced decisions. Edited excerpts:
