Sbi Life insurance or Pension Plan ?

POSTED BY MILIND SARAF ON March 24, 2014 2:48 pm COMMENTS (7)

I am having sbi maxgain home loan rs 1753000 for 18 years , partially disburse since oct 2013. I have opted for Rinn Raksha for rs. 1753000 full loan amount. Nominee is my wife.

My age is 42 years. I am planning to buy sbi e-shield online term policy for rs 2000000/- for 17 years. In your last advice you have suggested term insurance should be approx around 15 times of your yly income. My yearly income is rs. 300000/- As i have already protected my home loan therefore i am planning for only rs 2000000 /- coverage in sbi eshield.

Also suggest/advice me whether term insurance is better or should i take pension plan also? being  i am working in pvt firm and wife is working in co-op bank, we both dont have any pension for retired life.


milind , pune




7 replies on this article “Sbi Life insurance or Pension Plan ?”

  1. Viren Phansalkar says:

    Yes Milind, as suggested by Ashal please opt for 50L….
    Also, check premium for 45, 50 and 51… most of the times premium is higher for coverage below 50 (correctly highlighted by Ashal above)

  2. ashalanshu says:

    Dear Milind, 15 times is minimum. So home loan is over and above that. So rinraksha has nothing to do with basic cover. It has cover your home loan only. So for 3L Rs. yly income opt for 50L cover as it ‘ll be cheaper than 45L Rs. cover.



  3. ashalanshu says:

    Dear Milind, at 3L Rs. yly income, how did you reach to figure that 20L Rs. term cover is good for your family?



    1. MILIND SARAF says:

      dear ashal
      i reach to 20 L figure , as advice by you term insurance should be 15 times of your yly income. so in my case it comes to 45 L , but my asumption in quoting 20L was that i already have rinn raksha for 1753000/= therefore 45-17=28L.

      I know in case of my death rinn raksha will not pay money to nominee but after paying o/s home loan at that time, only papers of propery will be h/o to my nominee ie. my wife.

      Ashalbhai, thanks for cross questioning but here is your experience and knowledge , advice is needed therefore request you to kindly correct me and suggest me correct fig of term insurance in my case.

      Thanks and waiting for your prompt advice.


  4. Viren Phansalkar says:

    Hello Milind,

    I doubt if the Rinn Raksha would have your wife as nominee. Rinn Raksha always insures the outstanding loan amount. And in case of death of the applicant the outstanding amount is paid to the bank.
    I would be happy to hear on this since I have this too.

    1. MILIND SARAF says:

      dear viren
      yes you are right , i mean to say that in case of my death my wife dont have to pay outstanding loan, yes she will not get money , u r right. Bank will only handover the papers of property to nominee in my case its my wife.

      my view is wrongly framed in the sentence by me. any way thanks

  5. Raja says:

    Term insurance and pension plan are for two different purposes. one of for contingency planning and the other is for retirement planning.

    1. What if one does retirement planning but has no term insurance and he dies before retirement – only the money saved in the retirement fund will go to the nominee, which will depend purely on the invested amount.
    2. What is one has term insurance but not retirement policy – At retirement he has to depend purely on what is saved during the work life.

    My view, Term insurance is MUST. Whether you take pension plan or not is up to you. If you are a smart investor, you can save money without taking the pension plans offered by many companies. If not, and you want to systematically save some money for retirement, go for a retirement plan. Did you consider NPS in this case?

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