What kind of financial goals can be addressed through investment in endowment and unit-linked policies?
Savings in endowment and unit-linked policies should be essentially looked at for long-term financial goals, with a horizon of 10-20 years. These policies can help meet some essential goals such as child's marriage or higher education, loan repayment or legacy planning. These policies over a long run give better returns and provide financial protection by way of death benefit which is significantly higher.
I am 65 and lost my son a year ago. He's survived by his wife (32) and a son (2). While my daughter-in-law is working, I have a responsibility towards my grandson and my wife. Should I buy a term policy? What would be the cost of a Rs 1-crore policy? My monthly income at present is Rs 5,000.
Buying a term cover at this age It will not be advisable for the following reasons:
I am 32 years old and just bought a house on loan. The bank wants me to buy a life insurance policy to cover the loan. But it advised me against linking my existing policy to the loan. I have a Rs 1-crore policy and I feel, even after covering the loan, the policy will be able to pay my family after me. Would you agree?
While you may feel the residual amount (after paying off the loan) will be enough today, please take into account factors like inflation, rising costs of education and health expenses and so on, when you assess the same. It is also essential to evaluate that if anything unfortunate happens to you, there will also be loss of future income to your family. We suggest you finalise your decision by evaluating these factors and go for an insurance cover.
Savings in endowment and unit-linked policies should be essentially looked at for long-term financial goals, with a horizon of 10-20 years. These policies can help meet some essential goals such as child's marriage or higher education, loan repayment or legacy planning. These policies over a long run give better returns and provide financial protection by way of death benefit which is significantly higher.
I am 65 and lost my son a year ago. He's survived by his wife (32) and a son (2). While my daughter-in-law is working, I have a responsibility towards my grandson and my wife. Should I buy a term policy? What would be the cost of a Rs 1-crore policy? My monthly income at present is Rs 5,000.
Buying a term cover at this age It will not be advisable for the following reasons:
- Premium payable will be higher, given your age (approximately Rs 1 lakh each year for a term of 10 years)
- Premium might be further increase or your proposal could be rejected by life insurers after assessing your health or medical conditions
- The term available will be only 10 years, as the cover is bought late
- A high cover of Rs 1 crore may not be offered to you due to your high age and low income
I am 32 years old and just bought a house on loan. The bank wants me to buy a life insurance policy to cover the loan. But it advised me against linking my existing policy to the loan. I have a Rs 1-crore policy and I feel, even after covering the loan, the policy will be able to pay my family after me. Would you agree?
While you may feel the residual amount (after paying off the loan) will be enough today, please take into account factors like inflation, rising costs of education and health expenses and so on, when you assess the same. It is also essential to evaluate that if anything unfortunate happens to you, there will also be loss of future income to your family. We suggest you finalise your decision by evaluating these factors and go for an insurance cover.
The views expressed are expert's own. Send your queries to yourmoney@bsmail.in
Today, Amitabh Chaudhry, managing director and chief executive officer at HDFC Life, answers your questions
Today, Amitabh Chaudhry, managing director and chief executive officer at HDFC Life, answers your questions