It is always difficult to sell and do business, especially if you think that the ‘other’ profession you do is teaching. Let me tell you about a friend who came to me enthusiastically to buy life insurance (3 stories actually)

One was a good friend – he said he wants to pay Rs. 20 lakhs as premium for 2 daughters (Rs. 40 lakhs @ 15% commission means Rs. 6 lakhs, not bad for filling up a form). I asked him why he wanted a policy (both were still studying in college – year was 2004). He said typically…”if something were to happen to them…”. I bluntly asked him, do you need the Rs. 4 crores if they are dead. He said no. I asked his wife, she said no. She interjected and said..well ‘my brother’s son has become an agent and he was asking us to put..so my husband decided to talk to you …’

I said it may sound cruel, but on the day of your daughter’s marriage gift a term policy of Rs. 5 crores to each son in law – and please continue to pay the premium. But think what your SON-IN-LAW and your ‘sambandhi’ will think!!

Largely life insurance is for covering expenses of the people who are left uncovered on the death of the breadwinner. If you are not the bread winner then you may still need a loan cover – other than that life insurance is just not needed.

I can think of many many people who need life insurance but do not have it. Similarly I can think of many people who are under insured. However I can also find housewives, non earning students, etc. all covered by life insurance plans. It sucks. that is all.

will do another story soon!

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  1. Agree with you, except for housewife part… My wife, even if not working provides a critical support that enables me to be a earning member. In her absence, I might have to either quit my job or shift to a reduced hours schedule, that would impact my earning significantly. The other option would be have a full-time maid/nanny/home-teacher (single person or multiple folks) at home, that might cost about 5-10K a month depending on where you live. I think life insurance on your housewife should be relevant considering this. It is unfortunate that insurance companies in India ignore the indirect earning potential of housewife and refuse to sell term plans, or push low SA (like <1 lac) or whole-life & endowment policies only. It is even more infortunate that you indirectly seem to support that stance.

  2. suggesting a way to beat the system… take term insurance while wife is working. after she quits, will the contract still be valid – or is it contingent on her earning the same till she dies???

  3. Param you are right and so is Subra. The moral hazard of insuring the life of a non earning housewife is far greater than ….letting a …

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