- Aseem Shrivastava
Insurance products in India have been sold as investment/tax saving options. The agents present a rosy picture of getting something in return after years of investment and it does sound lucrative. The agents know people in India would consider any plan that promises something in return. That the return offered is pittance in the unfortunate incident of death of the investor is often ignored.
The greed results in investment in multiple policies which offer ‘cant-mention-returns’. People invest in these return-based policies for years without realising that the insurance cover offered with these instrument will not last may be even one year.
Take stock
Spend some time and make a list of all your financial liabilities (include even future expenses like education and marriage of your child) and calculate the returns from the investment. The outcome of this exercise will do two things: first you will know where you stand in terms of investment and second and more important what course correction steps you need to take.
Take steps
If all your insurance investment is return-based, go for a term plan as early as you can. Remember the early you start the less premium you have to pay. It’s purest and best insurance cover.
The chart shows how cheap it is to get Rs 50 lakh cover for a 25-year-old.
People who opt for these ‘guaranteed return’ plans should understand and treat insurance as what it is supposed to be – taking adequate cover to take care of long term financial needs of the family in their absence.
Get on the net
Search for the best Term policy available on the net. Its faster, cheaper, convenient and transparent. You will get all the tools that will help you calculate your insurance and in less than 10 minutes you get a cover. The agent route is best avoided.
Go for Term plan. It is one decision you will never regret and one which your family will always thank you for.
(Premium source: Policy Bazaar. The premium figures are indicative and are without any riders.)
