7. Confirm tenure is appropriate: “The insurance representative offered me an endowment policy for 30 years…and at age 44…I am wondering how will be able to pay the premium after I retire…what should I do Subra?”.

GENUINE READER QUERY…My answer is a separate post….will do it soon. Here it is:

Appropriate tenure of a risk cover is ‘as long as the risk is there, there should be a cover’. When you take a life insurance cover ….ok here is the conversation.

Friend: Subra till what age should I take a life cover?

S: Let us get to the basics….Why do you need life insurance?

F: Because it is customary …you also keep saying in your blog …extolling people to take term insurance and medical insurance…So i guess i need to take some life insurance.

S: No. You take life insurance so that your dependents are not left in the lurch if you die soon.

F: I have been told that I should take life insurance till the age of 75..because it is available.

S: No. You should take life cover till a) you bring home an earned income and b) as long as your income is necessary for somebody dependent.

F: Did not understand.

S: look you are 44 years of age, earning Rs. 55 lakhs ctc, have a net worth of Rs. 4 crores, have a wife who is earning Rs. 28 lakhs and 1 kid in college and 1 kid in school. Seriously speaking THERE IS NOBODY DEPENDENT on you. Your home loan is paid off, your parents have a nice big house, your in laws are well off. Seriously if you die today, nobody (not even your wife) is going to miss you FINANCIALLY. So frankly you do not need any life insurance.

However as an agent, I will pitch 55 lakhs * 10 = 5 crores of life insurance.

Subra’s working: Term insurance required : NIL.

reason: Nobody financially dependent. His wife can easily maintain this standard of living, EVEN IF SHE were to leave the job.

hmmm the life insurance companies are not going to like this way of thinking…kya karen?

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  1. Dear Subra,
    I am sure not even 1% of your readers fall into the category of 55L ctc 🙂
    IMO, if a person has gathered 4 crores is financially very wise (and so don’t need anybody’s advice).
    All I want to request you is please write posts about us not-so-wealthy people 🙂

  2. Zhilmil (i hope this is not your name) amazed at your accuracy. BTW i can only write what i know or what somebody asks me to reply. Did u notice i have almost no posts on borrowings?

  3. Please let us know jobs giving ctc of 55 lacs .
    Funny part is if people have that much ctc why do they need any insurance crap ?

  4. i do think people who are capable of getting jobs of 55L know where they exist. If that is all you understand of ‘insurance crap’ you need to read a lot more.

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