POSTED BY August 5, 2011 8:23 am COMMENTS (6)

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Hi all…

For term insurance, I got a quote from agent as below.

Age : 30 years

Term : 35years

Insurance Coverage : 50 lakhs

Premium : 19,400 yearly (19,400 X 35 = 6,79,000)

Single Payment : 2,81,850 (One Time Payment)

What is ur views on choosing single payment or yearly premium?

In case something happened to X person and term insurance is claimed, Do we need to pay the yearly premium after claim for the remaining years?

Generally until what age we should be insured say 55? 60? 65?

Sorry friends i have posted wrong Answer above… It is Rs 1500 per year not Per Month…

Whole ans is Wrong….

@ Rameshji

I agree with ashal jauhari ji.

Rameshji u can also do like this.

For first year, the net prem. amount in your pocket after paying 19400 Rs. is 262450 (281850-19400).

Invest Rs 262450 @ 8% p/a, u will get rs Rs 20996 p/a from which u can easily pay rs 19,400 for ur term Policy every year..

Rest Rs 1596 or Rs 1500apprx (20996-19400) in SIP which may be give u 10-15% p/a in long term.

If we asume atleast 10% return from SIP , then your Monthly SIP of Rs 1500 @10%PA after 35 Years will be Rs 57,42,415 /- (57.5 Lakhs). Can You imangine this.

This is the benifit of SIP with Term Insurance.

If somthing Happens to you then ur family will get Rs 50 Lakhs from Insurance company where u r Insured + Your SIP Amt upto where u invest +.Ur one time invest of rs 262450

Second, If Nothing happens to you then also You and Ur Family Get Rs 57,42,415 /- (57.5 Lakhs) just from SIP. + ur Onetime invest amt or RS 262450.

Which is quite Good .

Hope it will be usefull to u.

Mukesh

Hare Krishna

@ Rameshji

I agree with ashal jauhari ji.

Rameshji u can also do like this.

For first year, the net prem. amount in your pocket after paying 19400 Rs. is 262450 (281850-19400).

Invest Rs 2,81,850 @ 8% p/a, u will get rs Rs 20996 p/a from which u can easily pay rs 19,400 for ur term Policy every year..

Rest Rs 1596 or Rs 1500apprx (20996-19400) in SIP which may be give u 10-15% p/a in long term.

If we asume atleast 10% return from SIP , then your Monthly SIP of Rs 1500 @10%PA after 35 Years will be Rs 57,42,415 /- (57.5 Lakhs). Can You imangine this.

This is the benifit of SIP with Term Insurance.

If somthing Happens to you then ur family will get Rs 50 Lakhs from Insurance company where u r Insured.

Second, If Nothing happens to you then also You and Ur Family Get Rs 57,42,415 /- (57.5 Lakhs) just from SIP.

Which is quite Good .

Hope it will be usefull to u.

Mukesh

Hare Krishna

Dear Ramesh, Here are my 2 cents for the query. I did a simple calculation for the single prem. of 281850 Rs.

For first year, the net prem. amount in your pocket after paying 19400 Rs. is 262450 (281850-19400). At 8% interest rate after 1Y, this amount ‘ll become – 283446

After year 2 – 285170

after year 3 – 287031

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After 35 full years the corpus is, hold your breadth – 556868

It means – instead of paying single prem. to LIC, if you are keeping money with you, your cover is almost free.

There is more to it – In case of a claim – say after 20Y, the amount above said remaining corpus is 354886 & your family is still getting the basic sum assured of 50L Rs. & no more yly payment after that as the policy is closed after payment of sum assured.

So to me, the yly payment option is better than single one.

Thanks

Ashal

yes Manish, it is LIC. Thank u very much for ur reply.

I agree that yearly premium is much better than single payment after considering ur points.

Ramesh

Which Company is it ? I think its LIC .

You can choose the yearly premium thing , its not expensive , also consider that in future what premium you pay will have less worth compared to todya . So 2,81,850 today is probably more than ppaying 19,400 for 35 yrs .

Also , you dont need to pay premiums later after the claim . you need insurance till the time you thinik your family will be dependent on your monhtly income

Manish