TERM INSURANCE

TERM INSURANCE – GO FOR IT NOW !!

It's great to make investments that earn you big returns, but it's not so great to not have term insurance to protect your family's future in case you are not there to take care of them.

Unfortunately, not taking term insurance is a money mistake that far too many Indian investors make. There are many reasons that we pay less attention to term insurance than we do to mutual funds or other investments. Most commonly, people never sit and plan how their family would cope if they were to die suddenly. Perhaps this is because of optimism, or perhaps it's because of never being guided properly and not having a clear idea of how much money will your family need.

The great thing about term insurance is that it costs very little. Unless you leave it till too late, you can easily get a term insurance that is equal to ten years' income by spending no more than 1% to 3% of your annual income. This is an amazing deal. In all of personal finance, this the best example of getting a lot for very little. The sad part is that far too many people do not take term insurance ‘because you don't get anything back'. This is a grave mistake.

Term insurance is not an investment. It should be treated as an expense, an expenditure which affords protection. One should gladly pay and be happy that we may never have a situation where we get anything back from the insurance company. But if anything unfortunate does happen, then the returns are greater than from any investment.

One can be excused for getting a lot of things wrong in personal finance, but term insurance is not one of them.

Same thing holds good for health insurance too.

RAJIV KAPOOR

9839034761