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POSTED BY ON August 15, 2012 12:00 am COMMENTS (3)
My uncle, 54 years old and his wife 51 years old,both working, need life insurance as they hav one dependent their daughter, she is in 12th standard right now and a home loan worth 30 lakhs, now they want to cover the risk of her education and home loan, they want to go for term plan worth 50 lakhs each, but the premiums of all the companies at this age are quite high! difference between LIC premiums and other insureres is very less..so what kind of strategy should they chalk out for this? if not term plan is there any cost effective solution to this? they want insurance for term of 10 years from now on…their monthly salaries are in range of 70,000 each (total 1,40,000 a month, take home would be less, considering PF, EMI, FD and RD, they havent invested in Equities so far except one ULIP which was miss-sold to them), retirement age is 58 for both…some creative and cost effective solution is badly needed….
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can i split cover in the raito of LIC+SBI ? in the ratio of 50:50 ? (anmol jeevan+ SBI smart shield) ? Is it logical? what is ur take on dis?
Dear Ajinkya, considering there current situation, in my opinion, saving few Rs. should not be the priority but getting the cover should be.
So ask them to purchase the cover from anywhere they are comfortable at. Interestingly as age of both are on wrong side, the detailed medical check ups may increase the final prem. for both. Take note of this.
Thanks
Ashal
You have raised a very interesting point Ajinkya. Unfortunately, the harsh reality is that the premiums tend to increase dramatically after 40 years and even more if a person is in his 50s.
However, if one can afford, then they should go for a term insurance, specially more if they don’t have a substantial asset base and have dependents. Unfortunately, there is no cost effective solution. They should get a Term insurance – perhaps a group term insurance for the husband and wife may be cheaper. Try out SBI Life – they are cheaper than LIC, but expensive than online insurance providers. I would believe that for 50 lacs per person, the total insurance premium per month would not be more than 3-4K per month for both of them. If they are earning around 1.4 lacs, this is a small % of their overall income.
Regards
Banyan Financial Advisors