Term Insurance

POSTED BY Ashwin Rao ON September 19, 2012 11:32 pm COMMENTS (13)

I am 33yrs old and planning to buy a term insurance. After going through your blogs I understood that ICICI and Kotak have good term insurance plans. Also LIC is an option, provided I am ready to shell out more on premiums.

My 1st question >>> What term should I choose, 20/25/30yrs, what is better for my age, the shortest of 20yrs or the longest of 30yrs.

My 2nd question >>> What if I die after couple of years of the policy start? Will my family get the benefits? Also if I complete the term of 20yrs or 30yrs (whatever I have chosen), do I get the money back at the maturity or after my death?

My 3rd question >>> What if the company/bank does not exist after 15-20yrs? How do I get my money back?

My questions may sound silly, but please be kind enough to answer my queries.

Regards…. – Ashwin.

13 replies on this article “Term Insurance”

  1. Ashwin Rao says:

    Yes you are right Ashal.
    Although I got a bit irritated initially but now I know why you were asking questions back to me. I will definitely search about MFs in this forum and then get back to you if I have queries.

    I appreciate your way of making people knowledgeable by complelling them to dig further,
    Thank you very much,
    Ashwin

    1. Dear Ashwin, please feel free to ask as & when you need so.

      Thanks

      Ashal

  2. Ashwin Rao says:

    Hi Ashal,
    I went through some more blogs about insurance/investment and finally 1 of them made me understand that if I merge insurance with investment then it will be the worst thing to do.

    If I want to invest to get more benefit later, then mutual funds/ULIPs are better option. If I want an insurance then better go for term insurance so that in case of my untimely death, the SA can help my family to continue wiht their expenses (if not luxury)

    So now, over to you. Please advice me what I have understood is right.
    If YES, then please guide me on how to choose Mutual Funds/ULIPs.
    If NO, then please enlighten me on these tricky topics.

    Reference: http://goodfundsadvisor.blogspot.in/2009/03/my-view-on-lics-jeevan-anand.html

    Regards… -Ashwin

    1. Dear Ashwin, now you are on right track. Mixing insurance with investment is a bad practice & it ‘ll provide neither good insurance to your family in case of need, nor good return on your investment. But again You are asking for ULIPs (Unit linked Insurance Plan). Please avoid these products.

      All the other basic queries are already answered by dear Harsh, hence not repeating the same.

      To answer the query – selection of MFs, instead of spoonfeeding you, I w’d like you to read in this forum for past queries & you ‘ll get 2 things –

      1. Answer for your query – in which MF should I invest?
      2. Knowledge to understand all these things clearly

      Hope you are enjoying my approach as I’m trying to make you stand on your own legs (instead of providing direct support to make you become dependent on me or any other).

      Thanks

      Ashal

  3. Ashwin Rao says:

    Hi Harsh,
    Thank you for the answers, you cleared all my doubts.

    Hi Ashal,
    Answers for your questions…
    if you are no more after 4-6-10 years, what this Term plan ‘ll do to your family? — — If I am not there then the SA can help my family sustain for sometime until they can find an alternative for their living.

    Now if you are still alive till the end of the term plan, what ‘ll you do for your family? — — I am not able understand what you are trying to put across through this question. Definitely I will look out to secure the future for my family by earning enough for them, getting my children good education. I mean this is what every person will do for his famiily. Am I right Ashal?

    Regards… -Ashwin

    1. Dear Ashwin, thanks for the answers. Now you are very much clear in your thought process which I’m simplifying for you.

      1. If I’m no more – Sum assured received from my Term cover ‘ll (actually it should) provide the financial ability to my family to complete all the goals without any worry.

      2. If I’m alive & earning all these years, I’m already achieving the goals I set for my family in terms of kids’ education, career, marriage, own house, own vehicle, retirement.

      Now for point no. 2, problem starts when the people start asking – how much amount ‘ll I get as return at the end of term. My dear friend, you are alive & that’s the best rerturn possible to your family. Is n’t it?

      Thanks

      Ashal

  4. Harsh Puri says:

    Hi Ashwin,

    Please find answers inline:

    >> My 1st question >>> What term should I choose, 20/25/30yrs, what is better for my age, >> the shortest of 20yrs or the longest of 30yrs.

    I would recommend the longest tenure, even 35 years.

    >> My 2nd question >>> What if I die after couple of years of the policy start? Will my family >> get the benefits? Also if I complete the term of 20yrs or 30yrs (whatever I have chosen), >> do I get the money back at the maturity or after my death?

    I think your family will get the cover payout no matter when you die, as long as the policy is in effect at that time. For instance, if you die a day after the 35 years, no money will be paid out. I have never seen any documentation which suggests there is a period after you take the policy when your cover is not valid.

    Money back at maturity? This is a term plan you are taking about, you dont get anything back unless you die.

    >> My 3rd question >>> What if the company/bank does not exist after 15-20yrs? How do I >> get my money back?

    Money back again, wrong question. Now if you die in the period and the company has vanished, what will happen to your life cover payment? Not sure about this, maybe some experts can enlighten both of us :).

    Cheers

  5. Ashwin Rao says:

    I am sorry Ashal, but I am unable to understand your question. Could you please elaborate?

    Regards,
    Ashwin

    1. Dear Ashwin, here it is – if you are no more after 4-6-10 years, what this Term plan ‘ll do to your family? Now if you are still alive till the end of the term plan, what ‘ll you do for your family?

      Thanks

      Ashal

  6. Ashwin Rao says:

    Hi Ashal,

    I am looking for a term insurance for my family. I am not married now, but will be in another 6months.

    Regards… -Ashwin

    1. Dear Ashwin, I’m rephrasing my question to get an answer from you. What this term cover ‘ll do to your family?

      Thanks

      Ashal

  7. Ashwin Rao says:

    Hi Manish/Ashal,

    I think I am making some mistake while posting my query, I have entered my query in the description but nothing is appearing here. Hence re-entering my questions.

    I am 33yrs old and planning to buy a term insurance. After going through your blogs I understood that ICICI and Kotak have good term insurance plans. Also LIC is an option, provided I am ready to shell out more on premiums.

    My 1st question >>> What term should I choose, 20/25/30yrs, what is better for my age, the shortest of 20yrs or the longest of 30yrs.

    My 2nd question >>> What if I die after couple of years of the policy start? Will my family get the benefits? Also if I complete the term of 20yrs or 30yrs (whatever I have chosen), do I get the money back at the maturity or after my death?

    My 3rd question >>> What if the company/bank does not exist after 15-20yrs? How do I get my money back?

    My questions may sound silly, but please be kind enough to answer my queries.

    Regards…. – Ashwin.

    1. Dear AShwin, first of all I want to clarify that you are not asking silly question. Now instead of answering your queries directly, May I ask a question to you?

      Why are you purchasing Term cover?

      Thanks

      Ashal

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