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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.)

Omar welcomes Indus Water Treaty suspension, calls it “most unfair document” for J&K



SRINAGAR: Jammu and Kashmir Chief Minister Omar Abdullah on Friday welcomed the Central government’s decision to suspend the 1960 Indus Waters Treaty (IWT) with Pakistan following the deadly Pahalgam attack that claimed 26 lives. He also referred to the treaty as the “most unfair document” for the people of J&K.


“The Government of India has taken some steps. As far as Jammu and Kashmir is concerned, let’s be honest. We have never been in favour of the Indus Waters Treaty. We have always believed it to be the most unfair document to people of J&K,” Abdullah told reporters in Srinagar after meeting representatives from the tourism, trade, and industry sectors. However, he noted that the long-term impact of this move is still uncertain.


The IWT suspension is part of India’s response to the brutal attack. Other actions include expelling Pakistani military attaches and shutting down the Attari land-transit point immediately.


When questioned about the impact of the April 22 attack on the region’s tourism industry, Abdullah dismissed concerns about monetary losses. “At this juncture, we are not counting rupees or paisa. Not one of the businessmen or stakeholders in the tourism industry who attended the meeting lamented the loss of business. Not one of them expressed any concern about what would happen to them.”


“Right now, our priority is to express solidarity with the bereaved,” he said, adding, “At some point in future, we may sit down to discuss the financial implications (of the attack) on J&K’s economy. But not a single stakeholder present in the meeting raised a demand for monetary relief for the losses they are suffering.”


Omar described the tourist exodus from J&K after the massacre as “heartbreaking”. The future of the Valley’s tourism sector remains uncertain, with widespread trip cancellations following the attack.

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