Why life insurance?

I recently heard of a motor cycle accident – 27 year old boy…need I say more? Wife has a 3 year old kid and one more coming into the world. It was a love marriage with not much blessing from the boy’s side.

About 6 months back it looked like a typical fairy tale. A decent degree, boy falls in love with a girl from another community, gets married, has a baby, gets a promotion, wife stays at home to look after the kid….

then suddenly the whole thing falls apart.

Not much life insurance (who thinks a 27 year old will die?), thankfully the home loan company had forced a ‘term cover’ – which will take care of the home loan. Then what? Wife goes back to a job? Who will look after the kid? And what about the next 12 months when she needs rest and vitamins? What can be your fall backs?

1. Life insurance: take a simple life insurance. For heavens sake go to a comparative calculator find the cheapest Term Insurance from a company you trust. (I choose Hdfc Standard Life which was then the cheapest for me)

2. Have a real good relationship with your siblings and parents: I have not discussed this with my sibling, but my daughter thinks it is her right to stay with my sister if I and my wife are not around. She was surprised I even asked. I am sure (I hope!!) that is true for my niece as well – financially and physically. However that does not mean I should not insure myself – that would be STUPID. Absolutely stupid. If you have dreams, back it with a term life insurance.

3. Have a fantastic friends network: those friends whom you can trust. Trust can come only if it is a 2 way traffic. Talk about this with your friends. One friend kept telling his wife “If something happens to me please seek Subra’s help”. His wife told me one day after he died, and she trusts me absolutely for her money (and some non money) decisions.

4. Build a good relationship socially – some people cannot. I am one such animal. I have cousins, sibling, parents, uncles, aunts, etc. but am not a great social animal.

That is all. So find out how much of ‘back up’ support you need – then go and build it. TODAY. NOW.

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3 Responses to “Why life insurance?”

  1. Good one. What you stated is fact? Insurance is considered as expense not protection.

  2. Absolutely bang on….I dunno why ….i get tremendous insight into your articles….feel like it’s abt me ….am sure others do as well

  3. virendra ahuja on March 25th, 2009 at 3:22 pm

    dear mr.subramoney,
    thanks for ur every letter in ur blog. you draw a very clear picture on the discussed matter.
    since last one month i read ur blog every day.
    thanks once again for ur tremendous ideas.
    with regards.

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