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Ask Mint Money | Look at insurance as a long-term savings and protection tool

Ask Mint Money | Look at insurance as a long-term savings and protection tool
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First Published: Tue, Feb 22 2011. 08 45 PM IST
Updated: Tue, Feb 22 2011. 08 45 PM IST
I am 33 years old and have LIC’s Jeevan Shree, Jeevan Anand and Jeevan Saral. The first two policies were bought six years ago, while the last one was bought three years ago. I have adequate term plans and other investments. What should I do with these three policies now? Should I continue till their terms end after 8-10 years or terminate them now?
—Shara Mallik
If you have already invested in these policies and have paid premiums, it is best to stay invested as this will help you maximize returns over a longer period of time. Insurance, by its very nature, is a long-term savings and protection instrument and should always be viewed as such. If you stop them at this stage, you will not be able to get the benefit of compounded returns accumulated over a longer period of savings.
I bought a unit-linked insurance plan from a private insurer. I have paid two instalments amounting to Rs1.02 lakh. I have to pay another Rs36,000 next year. Is it a good policy, considering that I was looking at it more as an investment than as life insurance? Should I stay invested for a longer period? Also, suggest some good life-cum-investment policy.
—Neha Dhawan
Always assess your insurance needs with a mid- to long-term financial goal perspective rather than as short-term investments. It is always better to pay premiums on time for any life insurance policy in order to meet the objectives for which the policy was bought. There are many plans available in the market that you can choose from. However, it is better that you assess your goals and speak to an independent financial adviser prior to purchasing any specific plan.
I am 74 years old and have two sons and two grandsons. I want to know the most beneficial insurance plan for my wife and sons. Please also indicate how much I should ideally invest. I would like to take a plan in the name of my sons.
—Ramesh
It is extremely difficult to answer this question without having more data. However, at this age, your wife does not need an insurance plan. For your sons, you must assess their expenses, loans outstanding and their income. Ideally you should take a term policy for each of them. After that, you could look at long-term saving plans depending on their goals and the surplus left for investing at your (their) disposal.
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First Published: Tue, Feb 22 2011. 08 45 PM IST
More Topics: Ask Mint Money | Insurance | LIC | Ulip | Savings |