Honest to God, this conversation is not an exaggeration. Please read it, and tell me how useful this advise was:

Anchor: Sir, when buying insurance should you buy insurance or an investment too.

Expert: Well you should look at all the features. Normally people buy life insurance to get the 80C benefit. Which means in a decade you may have about 7-8 policies. However if you add all the sum assured it may be less. At this point in time you should see how much is the sum assured and how much you need. Then you should add up all the assets that you have and your liabilities. There maybe a huge gap……..

Second question:

What kind of a policy should a client look for: Well he should first look at a term policy and then also look at other types of unit linked wealth schemes. The end customer should look at the price, the features, and whether it has riders which are useful. Sometimes the rides are useful and you should see them also. You should look at the benefits that the policy offers. Then you should decide what to do…

————————end of story’————————————–

Is there anybody who understood anything from these 2 answers…frankly I did not understand. Since I know the answers it will be interesting to see how the readers of this blog answer and respond to this issue….

as usual i found it amusing…

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  1. It looks like the Expert is trying to make the issue complicated, it remind me one of your old article, “if you give lot of money to CA/CFA/MBA’s they can complicate mother milk also”.
    Life insurance = Term plan (I will prefer LIC, as claim refusal rate is low )
    80C = Tax saving mutual fund scheme/PPF/VPF ( 5 start rated fund from valueresearcheronline.com)
    Medical Insurance is some thing where I think there is some scope for research.

  2. Dear Subra, Can you plz tell on which channel you got this advice from? I will like to stay from it in future.

  3. Its best to Multiply Gross by 120 ( 10 yrs salary) or 144 (12 years salary) by taking a nofrill plain vanilla term policy online and stop discussion on topic

  4. question: as one approaches retirement or has met the goals set out,is it wise to stop the life insurance policies?
    i mean if somone is 55 and is reasonably well off and has ensured future cash flows for his dependents(who are probably in a job by now and arent really dependents),is it wise to no longer continue the 2cr policy they bought 15-20 years ago? or should they let it run the next 5-10 years?

  5. @Pravin The simple answer is you do not need insurance after retirement. But the BIG assumption here is that you have accumulated your retirement nest egg by then. At this stage if the person passes away then the insurance money that the family receives is actually not required. Then why pay for the unnecessary premium.

  6. On One: Term plan is undisputed as first choice when the word “insurance” is being discussed. Post that, the unit linked plans have also been advocated (basically from your blog only i have read) – provided person holds them in a disciplined manner for longer term to even out the costing and to gain from the long term appreciation in capital.

    On Two: To me this looks repeat of question one!! Because there are broadly two categories- those which offer insurance alone, and those which offer insurance + investment (which was the first question anyways).

  7. That was totally gibberish to me. Funny correlation, today I was sitting next to a sales guy in the bus and he had written notes that he was trying to memorize. I peeked over and it was all related to debt and ULIP products. I pity his customers that he had to memorize to serve them.

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