Do I Need Insurance ?

Well this is question most of ask ourselves after we tell the irritating caller that "I am not interested".

There are two kinds of people [Es duniya mein do tarah ke log hote hain]

• Type 1 : No I don't need it as "it" can never happen to me.OR
• Type 2 : I already have one.

Well if we carefully look around us.We will find enough instances to prove that we need insurance.[unless you have no dependents and will have none in future]

Some people may argue "you know all members in my family have lived till 80 my term insurance will be over by 60 , more so I do not get any money back .So why should I pay the premium ?"

Lets say you live in a society its highly probable that there has never been a theft ? Does that mean you stop locking the house ?

Do you get your money back from where you bought the lock if there is no theft ?

Though there is no comparison of ones life with a theft in the house but it does puts things in some perspective

Secondly through there are endowment plans which give returns .Term Policies are efficient . A term policy + a company deposit may give you better returns and cover as compared to an endowment plan.[However let a good financial planner decide whats best for you.As endowment plans once taken make forced disciplined saving ]

Type 2 : I already have insurance .You may have insurance which you took few years back to save tax .You need to evaluate your cover need from time to time .

E.g,A housing loan,Marriage,Personal Loan,Increase in Salary,Change / Upgrading your lifestyle,Birth of a child,Retirement of a parent,purchase of any big asset.

All these events are examples of events on which you should check your insurance cover
When income levels are low you might not be able to mitigate all your risk
For a typical individual the priority can be in the following order.

1. Life
   
2. Medical
3. Accident
4. Assets

For a typical individual life cover should at least be three times the annual salary.Here the presumption is that he has no liability and that his family / dependents will find alternate sources of income within 3 years.

By now you can see that insurance is more than a tax saving instrument or a compulsion by law [e.g.Car Insurance] its a need.

So be informed and take a decision on whether you have enough cover for a rainy day.