So you want to buy a term insurance plan but are not sure how to calculate life insurance coverage you need? Relax. This is a common situation. But rather than buying blindly, you should know how how much life insurance cover you exactly need. Else, you may end up being under-insured or over-insured, giving your family a lot of financial pain. A thumb rule that many advisors recommend is as follows. Age 25-35 years : 15-18 times current annual income + outstanding … [Read more...] about How to Calculate Life Cover Required for a Term Plan
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“Never buy Endowment Policies or Money Back Policies – they have the worst returns.” “Never mix Insurance and Investment.” “Don't buy any Life Insurance except Term Insurance.” These are opinions that you may have heard or read at some time. And these are based on logical facts, there is nothing wrong about them. But all this is not necessarily true for everyone, every time. Here's how and why. How do Endowment policies and Money-Back policies work Tax-free returns of about … [Read more...] about Endowment Policies in India – Don’t Trash them yet!
In Part 1, we covered WHAT should be the expenses that you need to plan for. To summarize, College, Post-Graduation and Marriage expenses should be planned for. Other expenses can be managed from regular income. Further, in Part 2, you read WHERE to invest your money and WHY that is indeed the best way - Equity, PPF, FD or similar instruments (in that order) could be a preference, provided you have time on your hands. You also understood the significance of having a Term Insurance … [Read more...] about How to Plan for the Future Expenses of your Child – 3
In Part 1 we covered WHAT should be the expenses for the child's future that you need to plan for. In conclusion we can say that College, Post-Graduation and Marriage expenses should be planned for. Most other expenses are smaller and can be managed from out of our regular annual family income. Part 2. What should be the approach when planning for child's future expenses? For fool-proofing the future of your child, you need a solid and shock-proof plan – nothing less. And getting … [Read more...] about How to Plan for the Future Expenses of your Child – 2
If you are looking for a term insurance plan, it is very likely you will bump across a variant "Return of Premium" (RoP). It is sometimes also called "Term Return of Premium" (TRoP) or Term Insurance with Maturity Benefit, or sometimes Premium Back Term Plan. Return of Premium Term Insurance is nothing but a term insurance plan but unlike pure term insurance, in this variant if you don't die during the entire term of the policy, then you get all your premiums back. But is it really as good as … [Read more...] about Return of Premium Term Insurance – Why it is not worth it
What is an Immediate Annuity? Imagine you are 60 years old and have Rs. 1 crore as savings including Bank balances, FD, MF, shares, etc. and excluding your house and land. Your income has stopped because you have retired from service now. You now want to use your savings to generate income every month, to take care of your own and your spouse’s regular living expenses. This is where an annuity plan comes in. Go to a life insurance company and deposit the Rs. 1 crore into an annuity (also … [Read more...] about Immediate Annuity Plans – What are they?