Risks Worth Taking in Life

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Risks Worth Taking in Life

Read this wonderful article which clearly states what risks are worth taking and what are plain stupidity – https://medium.com/show-your-work/45f136600f7e

 
Also, I would want to share a friend’s advice to me about term-insurance. His simple justification – “You dont want your dependents to be hammered/pestered with loan sharks when all they want to do is just mourn in peace, in darkness of an unfortunate event

Excerpt from mail of my friend: 

I am planning my overall insurance needs and thought I will share something quick and very important with you guys (ignore if you have taken care of this already)

Go through this for a quick overview: http://articles.economictimes.indiatimes.com/2012-03-26/news/31240130_1_term-insurance-aegon-religare-life-insurance-term-plan 

  1. Buy Term insurance = 20 times your salary. It’ll cost you anywhere from 10,000-30,000 a year without any returns/ money back (that’s the one you should choose) during your life time but in case of an unfortunate incident, this will keep the family very safe (infact, they can go celebrate! :P).
  2. Sooner you buy, the better as the premium will be lower and, well, you never know how long you will live. Your premium goes up on your birthday and it goes up every year after budget as well.
  3. I am looking at buying for maximum term allowed (up to an age of 72 years). People suggest 60 – 65 but I’d recommend the maximum and half yearly/ annual premium. Trick is – you can stop paying whenever you are done with responsibilities. No point making a decision now.
  4. Look for an online one. They are considerably cheaper than going through an agent since you save the brokerage charges. Just enter your numbers on a few insurance sites AND on Policybazaar. They will call you and you can speak to them for as long as you want and get your queries answered before you make a choice.
  5. You may consider adding on accidental and disability waivers as top ups.
  6. What you get in companies is not enough. I used to think that was a lot and always chose 2 X Salary even though 4X was allowed.
  7. You can buy as many as you want from different companies but the total cannot exceed 20 X current salary. I am not sure company Term amount needs to be deducted from the one you are buying personally. You will have to find that out
  8. You can buy more as and when your salary increases. I’d recommend buying one more again before turning 40. The premium amount goes up north as you cross 40.
Two important points to add to above -
  1. Do not depend on just 1 insurance policy – (Investment 101: Do not keep all your eggs in 1 basket). Make it 2 . Ex: If you are taking for 1C – Split it between LIC and Max Bupa.
  2. I have taken Max Bupa Life Insurance and it has least premium of all and a good claim settlement %. ( http://www.mintwise.com/claims-settlement-ratio-2012-2013/ , http://economictimes.indiatimes.com/personal-finance/insurance/analysis/dont-be-lured-by-low-premium-check-companys-settlement-record-too/articleshow/30941956.cms )
  3. All in all you can show this as tax-savings as well. 
  4. Also, just directly contact the company websites and they will help you with entire process. Its dead simple. 
  5. Even the medical has been done at my home in Max Life case

 

PS: I am not associated with any of the insurance agencies or not paid to write this article. I have written from my personal experience and the choices are purely based on my analysis. Please make informed choices and you can comment if anything best is available so that it is useful for everyone.

 

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