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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.)

Gamble and the Challenge

Updated: Nov 18, 2024

Eknath Shinde

As Maharashtra eagerly anticipates the election results on November 23, one name dominates political discussions: Chief Minister Eknath Shinde. Known for his bold moves, Shinde has reshaped the state’s political dynamics in unprecedented ways. In June 2022, Shinde set the stage for upheaval when he, along with several MLAs, left for Surat, plunging the coalition government into crisis. Just days later, with the BJP’s support, he assumed the role of chief minister, marking a shift no one saw coming.


The Maharashtra Vikas Aghadi, a coalition formed in 2019 by Shiv Sena, Congress, and NCP, had governed Maharashtra until Shinde’s exit. The impact of this political drama on state politics cannot be understated, as Shinde’s departure led to the fall of the MVA government. Over the past two years, Shinde has defied expectations, run a successful government while demonstrating independence from the BJP—a scenario few anticipated. His political acumen has now positioned him as a rising figure in BJP’s inner circle, potentially posing a challenge to BJP stalwart Devendra Fadnavis.


For Shinde, this election marks a crucial turning point. His objective is clear: securing wins for as many of his candidates as possible, solidifying his position in Maharashtra’s political landscape. However, the real test lies beyond the election results. In a political era where party loyalty is fluid, Shinde’s task will be to retain the loyalty of the elected MLAs.


Shinde’s journey from auto-rickshaw driver to prominent Shiv Sena leader has endeared him to the people, especially in Thane. Known for his humble behavior, he has built strong connections across all levels, from party workers to local households. However, this simplicity has led some BJP leaders to underestimate him. Now, even his allies realize that Shinde’s strategic mind and influence extend far beyond appearances.


One of Shinde’s significant achievements has been implementing the ‘Ladki Bahin Yojana,’ an initiative originally from Madhya Pradesh’s BJP government, which gained immense popularity in Maharashtra. This move not only showcases his keen sense of public sentiment but also distances him from his allies by establishing his independent policy-making approach.


Despite his growing influence, Shinde faces a challenge from the grassroots Shiv Sainiks who view him as a “traitor” for breaking with the Uddhav Balasaheb Thackeray (UBT) faction. Recasting the narrative behind his decision to part ways with UBT will be essential if he hopes to gain widespread voter support.


Emphasizing his motivations and successes, particularly with initiatives like the ‘Ladki Bahin Yojana,’ may help him connect with skeptical constituents.


With solid connections at the local level and rapport with senior BJP leaders like Prime Minister Modi and Home Minister Amit Shah, Shinde’s influence is likely to endure. This election will ultimately test Shinde’s leadership, resilience, and ability to navigate Maharashtra’s intricate political landscape. As Maharashtra’s political future hangs in the balance, Shinde stands at the forefront, steering the state’s uncertain course with both determination and ambition.

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