Are you Insured?

           

[imagesource : rising23.com] 

Insurance is In-assurance; the person who is insured will be assured of getting this money. Insurance has evolved over the years with different products with the combination of investment return options. To make the people insured insurance companies had started selling policies for 10 or 15 years with fewer sum assured through agents, after the end of the period the total maturity amount would have been lesser than fixed deposit amount. Do you know that roughly the insurance returns will work out to be around 5-6% and this cannot be considered as an investment. Insurance and investment are different and both should not be confused while choosing.

Risk Protection

Everyone should be insured to have a risk protection in their life. Just like wearing helmet for safety while riding the bike this is very much in need. Loss of a person can cause great grievance, but when they are insured that makes their family from getting not drowned in debt. Are you not risk averse? The daily bike ride, even if you drive safely there are times when you lose your life if hit by a car, bike or bus if you don’t wear helmets. Even if you eat safely you may get food poison or allergic once in a while, the reason for cancer is still unknown. Life is uncertain and at those uncertain times, insurance can give a helping hand.

                       

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Are you sufficiently Insured

Insurance should be taken considering the debt he\she has over the years and including monthly expense. For example, Sam draws a salary of 40k per month and has debts of around 15lakhs and till now he has taken insurance policy of 5lakhs for which he makes a premium of 30k per year. If he completes the full 20 years term he will be getting around 10lakhs, if he doesn’t survive his family will be getting only around 10lakhs. His family will not be able to close the debts and has he been the only earning member everything will turn upside down in his home now. Suppose if he has taken a 50lakh term policy, his family would have ended up 50lakh with which they would have closed all debts and would have been happy enough to lead a life in the society till someone starts earning.