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By:

Kaustubh Kale

10 September 2024 at 6:07:15 pm

Everything About Term Life Insurance

“Jo bachchon se kare pyaar, woh term insurance ko kaise kare inkaar!” If you love your family, term life insurance is indispensable. Financially securing your loved ones in the event of an untimely death is crucial, and term insurance offers this protection at an affordable cost. Protection, Not Investment Term insurance is the simplest form of life insurance. You pay a relatively small premium and receive a large life cover for a fixed period. Unlike endowment plans or unit-linked insurance...

Everything About Term Life Insurance

“Jo bachchon se kare pyaar, woh term insurance ko kaise kare inkaar!” If you love your family, term life insurance is indispensable. Financially securing your loved ones in the event of an untimely death is crucial, and term insurance offers this protection at an affordable cost. Protection, Not Investment Term insurance is the simplest form of life insurance. You pay a relatively small premium and receive a large life cover for a fixed period. Unlike endowment plans or unit-linked insurance plans, it does not combine insurance with investment. This separation is important. Insurance should protect your family, while investments should help you create wealth. Traditional insurance-cum-investment plans often provide modest returns that may struggle to beat inflation over long periods. For many people, buying adequate term insurance and investing separately through suitable mutual funds or other investments can be a more efficient approach. For instance, a healthy person in their thirties may be able to purchase a term cover of Rs 1 crore for approximately Rs 15,000 to Rs 20,000 annually, depending on age, health, policy tenure and other factors. Insurance Needed You should strongly consider term insurance if your spouse, children or parents are financially dependent on you. It is also essential if you have liabilities such as a home loan, car loan or personal loan. Even a non-working spouse may require life insurance because replacing the economic value of household responsibilities, childcare and family management can be expensive. To summarise, if you have loans or plan to take loans, have children or plan to have children, or have a financially dependent spouse or parents, term life insurance is an absolute must. Enough Cover A figure such as Rs 1 crore may sound large, but it may not necessarily be sufficient. The right amount should be calculated based on your family’s actual financial needs. First, estimate household expenses. If your family spends Rs 10 lakh annually and you want to provide for the next 15 years, you may require at least Rs 1.5 crore for basic living expenses. Second, add all outstanding loans. A home loan of Rs 35 lakh and a personal loan of Rs 5 lakh would increase the total requirement to Rs 1.9 crore. Third, include future financial goals. If your children’s higher education is expected to cost Rs 50 lakh, the required cover rises to Rs 2.4 crore. Fourth, provide an additional amount for your dependent parents or spouse. Adding Rs 20 lakh would take the total requirement to approximately Rs 2.6 crore. Finally, adjust the calculation for inflation. Inflation gradually erodes the value of money. To ensure that your family has enough to meet rising expenses, it is wise to add an appropriate inflation adjustment to each of the above steps, as necessary. Do Not Delay Term insurance is generally cheaper when purchased at a younger age and while you are in good health. Disclose all medical conditions, lifestyle habits and existing policies honestly, as incorrect or incomplete information can create difficulties during claim settlement. Life is uncertain, but your family’s financial security need not be. The purpose of term insurance is simple: even in your absence, your responsibilities should continue to be fulfilled. (The author is a Chartered Accountant and CFA (USA). Financial Advisor. Views personal. He could be reached on 9833133605.)

Discussions on among allies for govt formation: Ajit Pawar

Updated: Nov 29, 2024

Ajit Pawar

Mumbai: Deputy Chief Minister and NCP head Ajit Pawar on Monday said discussions were underway among the Mahayuti partners to finalise a formula for the new government formation in the state.


Speaking to reporters at Karad in Satara district, Pawar also acknowledged the contribution of the government's Ladki Bahin scheme, which provides financial assistance to women, in the Mahayuti's victory in the just-concluded state assembly polls.


The NCP leader also assured that the alliance was working cohesively following its resounding victory in the state assembly elections.


Pawar paid tributes to Maharashtra's first chief minister Yashwantrao Chavan at his memorial in Karad on his death anniversary.


In the state poll results declared on Saturday, the Mahayuti, which comprises the BJP, Chief Minister Eknath Shinde's Shiv Sena and Ajit Pawar-led NCP, bagged an impressive 230 of the 288 assembly seats.


The focus has been on BJP leader and Deputy Chief Minister Devendra Fadnavis, who is being seen as a strong contender to occupy the top post for the third time, as his party bagged 132 of the 149 seats it contested in the state.


Notably, Maharashtra minister and Shiv Sena leader Deepak Kesarkar has said his party legislators feel Eknath Shinde should continue as the chief minister of the state, where the ruling Mahayuti scored a landslide victory in the assembly polls.


Ajit Pawar said, "We will decide what formula to work out on the cabinet formation among the three parties."


Reflecting on the elections, he acknowledged the contribution of the Ladki Bahin scheme in the Mahayuti's win.


"We cannot ignore that Ladki Bahin helped us in this election. We are grateful to them (women voters)," he said.


Defending the scheme, Pawar, who is also the state finance minister, further said, "Had I been opposed to the Ladki Bahin scheme, I would not have presented it in the House. I discussed the scheme with several retired finance officers before finalising it."


Pawar also dismissed concerns raised by some opposition leaders over the Electronic Voting Machines (EVMs), pointing out that polls in states like Punjab, West Bengal and Telangana, governed by their political opponents, have been conducted with the same system.


Commenting on members of same families contesting against each other during the elections, Pawar expressed annoyance over repeated questions on it.


He then asked, "Why was my close nephew fielded? Atram's own daughter was fielded against him, and even Rajendra Shingne faced a similar challenge. I don't want to comment further on this. I have got tired of apologising for fielding my wife against Supriya. Yugendra was in business, then why was he prepared to contest against me?"


In the Baramati assembly seat, Ajit Pawar was pitted against his nephew and NCP (SP) candidate Yugendra Pawar.


In Aheri seat, NCP leader Dharamraobaba Atram's daughter Bhagyashree Atram contested against him on NCP (SP) ticket.

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