Do not need life insurance…

Surely when somebody approached Mr. Dinanath Shinde and Mr. Afzal Maknejia for buying life insurance, they must have said:

a. I do not need life insurance or b. At my level I cannot afford life insurance.

Agents hear this day in and day out. Little did they realize that a drunk Nooriya Haveliwala would spring from somewhere and pluck their lives at Marine Drive. Drunk or not drunk, at 120 km /hr. in a Honda SUV killing is almost inevitable..

As this is a high profile case there is some chance that both these families MAY get some compensation from somewhere (there should be a law that the victim pays 5 times the annual salary of the victim to LIC which converts that into a pension for the families till the victim would have turned 65). However whatever they get will be like a ‘favor’ and not as a RIGHT. However if they had just taken a simple term insurance from LIC, Hdfc, Icici, Kotak, Religare, TATA aig, Birla sunlife, Max new york life, Metlife,….ANYBODY these families would have got compensation as a RIGHT. There is a big difference.

Another unrelated death was that of a priest from a Mumbai temple (Garodia Nagar, Ghatkopar East, Mumbai) in a motorcycle accident about a fortnight back. Died young (32) leaving behind a widow and a small kid. His sisters marriage has been fixed…and of course he was supposed to pay….Now a few senior citizens (sad, but only they go to temples) are collecting money to pay his family something.

Agents, well wishers, friends, relationship managers, clients, readers of this blogs, ….let us all go out and preach about term life insurance. Whether there is death by accident or a heart attack…life goes on for the survivors. Life insurance is about the survivors, not about the dead. Children have to go to school, mothers have to look after children, sisters have to be married off, parents have to be looked after.

So if a temple asks you for a donation, offer to pay for GROUP medical and GROUP term insurance for its priests and other employees – or at least offer to give a one hour talk on the importance of planning. Vidhya dhan is a good dhan after all. And it is free.

My the soul of PSI Shinde and Afzal rest in peace. Hopefully they would have had some life insurance……I sincerely hope.

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8 Responses to “Do not need life insurance…”

  1. The guys with salaries sitting in the a/c rooms in insurance companies do not have visibility beyond 50 feet, so isn’t it a tall order to expect agents whose income is completely variable to have a vision beyond 2-3 years? ….The bigger laughs I get is when I read some hotshot analyst report on the valuations of a ICICI/HDFC?Kotak etc. all diversified financial services giants and their SOTP (sum of the parts valuations). Lets get it straight, selling term insurance is somewhat like growing a ‘micro-finance’ business – you need low overheads to grow the numbers, create some social pressure to ensure the books are clean (note, this is diffrent from zero-risk)….the pay-offs will come in years to come…capitalists with goals of near-term profits through P&L or market listing should be avoided like the plague….and so also agents who are only motivated by foreign junkets or CRVs!

  2. 50 feet! U gifted them a binoc? WE are all simple human beings. All of us know we are overpaid (my annual compensation is 25 times my fathers accumulated PF). Some of us accept we are over paid, and terribly bored. My boss is afaraid to ask me what am I doing – he has more at risk than I have at risk. Luckily all my loans are paid off – and at my salary level jobs are not available. I hate my work environment does not mean I should quit, correct? Be happy…

  3. I will definitely try to give the type of donation u asked.

  4. What you said is right and makes perfect sense. However people seldom take responsibilities at an individual level and think about the impact of their death or disability on there family.

    I personally have tried to drill down this point to several people. But not even one person seems to have take it on a serious note. People often think that after death the relatives and friends will take care of there family and as for the rest they say “whatever fate has in store for them, is going to happen, insurance or no insurance, what difference is it going to make”.

    Also one general mis-conception that the insurance agents promote is the money invested in a term plan doesn’t generate any returns hence is a waste. The insurance companies promote such mis-selling because it leads to higher returns (as ULIPs have much higher margins). Its time that they Insurance companies also take partial responsibility and start educational/ promotional initiatives to spread awareness about Term plans. It will be great if IRDA gets involved and gives some incentives to the companies for doing so.


  5. A very good and crucial point you raised here. I’m going to visit in my native remote village after few days and will try my best to convince all my relatives/friends there to opt for term insurance. These poor fellows often have single bread winner in family and if there’s any unfortunate event happened… life becomes hell for all others.. children affects worst.

    Instead of donating to some temple,puja etc.. I’ll feel more satisfied to pay premium of their simple term insurance policy.

  6. Dr Mohammed Ali Khan on February 1st, 2010 at 10:50 pm

    I feel that the priests of various religions should be educated to insist that the groom take a life insurance policy and make his bride as the nominee, before performing the marriage rites.. Or before they issue the marriage certificates…

    I agree with Ashutosh.. Insurance companies are partly to blame for their over-the-board promotion of ULIPs.

    Many of my relatives ask me ” What are the returns ? ” when I informed them that I have taken a life insurance policy.. Its very difficult to explain to them that there are NO returns if I survive..
    Even the agent through whom I purchased the term insurance first started his pitch with ULIPs.. But when I insisted that I want only term insurance and do not need any ” Investment Plan”, he grudgingly took a crumpled pamphlet from his bag which detailed the term insurance policy his company was offering… It pays to be financially literate…
    I am trying to convince my colleagues and relatives about the benefits of term insurance but largely without much success..

    The same people pay thousands of rupees for a full car insurance.. What returns do they expect if their car does not meet with an accident?

  7. In my seven years of insurance selling most of the people fail to understand the need for term insurance. Seldom anybody expects return on the vaccination one does, or on the money paid to buy a helmet but when it comes to insurance first question people ask is what is the return?. I have spent lot of time educating (vidhya dhan?) people on term insurance but inspite of this there is a banker or another insurance agent projecting unrealistic returns and appealing to the greed of the people and walk away with huge premium low cover ulips and other fancy plans.

    There are number of cooperative societies including housing societies in mumbai which can look at group term and group accident and medical insurances which is a safety net and collective bargaining cover if utilised properly would benefit the constituent members.

  8. last comment by Jay says ‘There are number of cooperative societies including housing societies in mumbai which can look at group term and group accident and medical insurances’

    100% agree with him…can anyone tell me if any insurance companies in india provide group medical or life inusrance policies for housing societies?

    many thanks in advance

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