How to start your Investments - Term Insurance Way

18th Mar 2010,
Bangalore , India
7:00 PM to 8:00 PM
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In India we have a pyschological , cultural problem with thinking about our death .In India there is a saying " if we discuss a bad outcome then it will happen forsure ".
The primary GOAL of any insurance is to offer a complete solution to your death.Only after this is resolved should one go for other terms like investments , returns and whatever.
How do we plan for our DEATH ? Let`s be straghtforward
Question -1
How much is your family need ?
This is based on various factors like ( Spouse working , how much income do you generate for your family , do you have children , do you have your own house , any other variables which you feel is important ).

Y = F ( X 1 + X 2 + ..................................)
Once you have figured out this Y , you should ask your insurance agent to suggest the lowest cost way of getting a insurance cover .
Question -2
Which is the lowest cost way of getting an insurance cover ?
Term Insurance and for god`s sake its not ULIP.
Lets simplify :
Let`s say Mr. Tommy is earning 50,000/- a month .
what is 5 years worth of current income = 50,000 * 12 * 5= 30 lakh cover .

Question -3
How to reach this goal of 30 lakh ?
Term Insurance = You have to pay anywhere between 5000 to 10000 a year and also this provides tax benefit.
If on the other hand you choose ULIPs you need to pay a premium of 6 lakhs a year .

Question -4
Term Insurance Costing prevalent in India is you can buy 100 months worth of future income in a 25 years policy by paying 2% to 4 % of your current monthly income .

Ex :
Lets say a person earns 10,000 a month and requires 10 lakh cover for about Rs 250 a month which is affordable and reasonable .

Question 5 :
When to buy ULIPs or any other Investment Product like mutual fund etc
Have adequate risk cover that makes your family safe from any mishap and the best way to get this is by Term Insurance .