Friday, September 26 2025
Source/Contribution by : NJ Publications

In today's uncertain world, securing your family's financial future is not just wise—it's essential. One of the most effective ways to do that is through term life insurance. Term insurance is a pure life cover that offers a large sum assured at relatively low premiums. It is designed to protect your loved ones in the event of your untimely demise. A promise to your family that is simple, yet powerful. 

This payout can be a lifeline, helping them manage daily expenses, clear debts, and secure their future dreams. This article serves as a guide, highlighting five essential things to remember before you make the right decision.

1. Assess Your Needs - Risk Cover Amount

One of the biggest mistakes people make is underestimating their life cover needs. The primary purpose of term life insurance is to provide financial support to your family in your absence. Hence, choosing the right coverage amount—also known as the sum assured—is crucial.

A ₹1 crore life insurance cover might sound impressive, but is it enough to sustain your family's lifestyle for the next 20-30 years? How much is adequate? As a general rule, your life insurance should be at least 15 to 20 times your annual income. But that's just a thumb rule. Consider your existing liabilities (like home or car loans), future expenses (children's education, marriage), day-to-day living expenses, and inflation. An insurance sales person can help you with this calculation, but understanding the basics empowers you to make a sound decision.

For instance, if you earn ₹10 lakh per year, a life insurance cover of at least ₹1.5 crore can be adequate. However, if you have a home loan of ₹40 lakh and two children whose future education would cost ₹10 lakhs, you should opt for a cover of ₹2 crore.

Remember: Life insurance policy is not just to clear your loans but to replace your income. Don’t underinsure yourself just to save on premiums. Your family’s future should not be compromised due to inadequate planning.

2. Select the right policy tenure

Another important factor is the duration of the term plan. Ideally, the policy should cover you until you reach financial independence—that is, when you have enough assets or savings that your dependents won’t need an insurance payout if something happens to you.

A term policy is a contract for a specific period, and if you outlive it, you don't receive any payout. The ideal term should cover your primary earning years and key financial responsibilities.

Most people in India opt for coverage until age 60 or 65, coinciding with retirement. However, some term plans allow coverage up to the age of 75 or even 85. Be mindful, though—longer tenures come with higher premiums.

How to determine this - is by asking yourself:

• When will your children become financially independent?

• How long will your family depend on your income?

• Will you have significant savings by a certain age?

Choose a policy term that adequately matches your life stage and responsibilities. This ensures that even if something were to happen to you, your family would have a safety net until they can stand on their own feet.

3. Do Not Hide Health or Lifestyle Information

Life insurance is based on the principle of "utmost good faith." This means you must disclose all relevant information to the insurer, especially regarding your health or lifestyle. Always be honest while filling out your proposal form. Hiding a pre-existing medical condition, smoking/alcohol habit, any other health-related information, existing insurance policy or a rejected proposal, can impact your new policy.

Be honest and transparent. If you're a smoker, declare it. If you have a history of diabetes or high blood pressure, mention it. Insurance companies assess your risk profile based on the information you provide. While it might slightly increase your premium, it guarantees that your family's claim will be honored when they need it the most. Hiding facts may lead to denial of claims later, defeating the entire purpose of buying insurance. 

4. Expand the cover with add-ons/riders

Basic term life insurance covers death due to natural or accidental causes. But additional protection can be obtained through riders—add-on benefits that enhance your base policy cover for a minimal additional premium.

Common riders include:

• Critical illness rider: Pays a lump sum on diagnosis of serious illnesses like cancer, heart disease, etc.

• Accidental death benefit rider: Pays an extra amount if death occurs due to an accident.

• Waiver of premium rider: Waives future premiums in case of permanent disability or diagnosis of critical illness.

5. Consult a Professional 

While term life insurance may appear simple, making the right choice requires professional guidance. The complexities of identifying the need for life insurance & process of getting one requires help from an expert. Consulting an insurance sale person can help you:

• Customized Needs Assessment: An advisor will go beyond the basic calculations and understand your specific family dynamics, income patterns, and future aspirations to recommend a policy that is truly customised to your needs.

• Understand Policy Terms & Conditions: Insurance policy documents can be dense and filled with technical jargon. An expert can help you understand the exclusions, riders, and terms and conditions, ensuring you are fully aware of what you are buying.

• Claim Settlement Assistance: In the unfortunate event of a claim, an advisor can provide crucial support to your family, helping them with the documentation and processes, and ensuring a smoother settlement experience.

• Informed Decision Making: An Insurance sales person can help you compare different policies from various insurers based on their policy benefits, add-on riders, claim settlement ratio, empowering you to make an informed decision rather than just choosing the cheapest option.

Summary

Buying a term life insurance policy is a long-term commitment and a crucial step towards securing your family's financial future. By adequately assessing your life cover, choosing the right policy term, being transparent about your health, getting rider/add-ons, and most importantly, consulting a professional, you can ensure that the policy you buy provides the security and peace of mind you intended it to. 

However, while affordability matters, don't make price (premiums) the only deciding factor.

Disclaimer: Mutual Fund investments are subject to market risks, read all the scheme related documents carefully.

Friday, September 5 2025
Source/Contribution by : NJ Publications

When it comes to building a strong financial portfolio, most people focus on savings, investments, and growing our wealth. While these are important, one crucial aspect often overlooked is protection. Life has a way of surprising us, and not always in good ways. No matter how well you plan your finances, an unforeseen event such as a health crisis, accident, or damage to your car or home can derail your financial goals. That's where insurance steps in-not as an expense, but as a shield that safeguards your wealth and secures your family's future.

Having the right set of insurance policies ensures that you are not forced to dip into your savings or liquidate investments during emergencies. Instead, your insurance acts as the safety net, quietly sitting in the background until you really need it, allowing your financial plan to stay on track.

Here are five must-have insurance policies that every individual should consider including in their financial portfolio.

1. Term Life Insurance - The Foundation of Financial Security

If you are the main income earner (breadwinner) of your family -meaning if your family depends on your income, then term life insurance is a must. It provides pure life cover-meaning in case of your untimely demise, your family receives a lump sum amount (or regular income or both) to meet expenses, pay off liabilities, and continue their lifestyle. You pay a premium for a specific "term" (e.g., 20 or 30 years), and if you pass away during that period, the insurance company pays the claim. Without it, your family would be left to navigate a difficult emotional loss while also facing a financial crisis.

Why it's essential:

• Provides financial security to your dependents in your absence.
• Affordable premiums for high coverage.
• Helps cover long-term goals like children's education or marriage.

Always choose a life cover amount that takes care of all your liabilities, future goals & income replacement in your absence.

2. Health Insurance - Protection Against Rising Medical Costs

Medical expenses are rising at an alarming rate. Even a few days in the hospital can cost lakhs of rupees. Health insurance ensures that you don't have to dip into your savings to pay huge hospitalisation bills. A comprehensive health insurance policy acts as a shield, covering expenses like hospitalization, doctor's fees, surgeries, and medicine.

Don't assume your employer-provided health insurance is enough; it may not be sufficient or have limitations like co-pay, cappings, etc; and is tied to your job. Having a personal policy ensures uninterrupted coverage, regardless of your employment status.

Why it's essential:

• Covers hospitalization, surgeries, and treatment costs.
• Prevents financial setbacks during medical emergencies.
• Access to quality healthcare
• Cashless benefit

Don't just look at the premium-get adequate coverage, exclusions, network hospitals and consult your insurance sales person.

3. Health Insurance for Parents - Caring for the Ones Who Cared for You

Caring for aging parents is a financial and emotional responsibility. As your parents age, their medical needs may increase, and so does the cost of healthcare. People make the mistake of including their parents in a standard family floater plan, which might not offer adequate coverage for age-related ailments and could significantly increase the premium for the entire family.

Having a separate health insurance policy for your parents is crucial. By securing this policy, you're not only protecting them but also preventing a financial drain on your own savings.

Why it's essential:

• Covers age-related illnesses and frequent medical needs.
• Helps avoid large out-of-pocket expenses for their treatment. Reduces the financial burden on you when your parents need treatment.
• Gives peace of mind knowing their healthcare is secured.

Buy these policies while your parents are younger and relatively healthier. The earlier you buy, the fewer exclusions and the lower the premiums. By purchasing a policy early, when you are less likely to fall ill, you can serve the waiting periods without any urgency or financial stress.

4. Personal Accident Insurance - Financial Safety in Case of Disability

While life & health insurance cover death and medical treatment, there remains a gap for accidental disability. Accidents can happen anytime, anywhere-at work, on the road, or at home. If an accident leads to a temporary or permanent disability, you could be unable to work, resulting in a loss of income. A personal accident policy provides financial support in such cases.

A PA policy provides a lump sum amount in the event of accidental death, total permanent disability, or partial permanent disability. Some plans even offer a weekly payout for a period of temporary total disability, which can help cover your daily expenses while you're recovering.

It's a critical safety net that ensures your financial life doesn't come to a halt just because an unexpected event has rendered you unable to earn.

Why it's essential:

• Covers both death and disability due to accidents.
• Provides compensation for income loss during recovery.
• Affordable premiums compared to the coverage offered.

Ensure your policy covers partial and total disabilities, along with income replacement benefits.

5. Vehicle & Property Insurance - Protecting Your Assets

For many of us, vehicles (car / bikes) and property (home / shop) are the biggest assets after investments. Accidents, theft, natural disasters, or fire can cause significant financial losses if you're not covered.

These policies ensure that you don't have to bear the entire cost of repairs or replacement out of pocket, a financial blow that could easily derail your long-term goals.

Why it's essential:

• Vehicle insurance is mandatory by law, but comprehensive coverage goes beyond third-party liability to cover your own damages.
• Property insurance protects your home or office from risks like fire, earthquake, theft, or floods.
• Provides financial security against unforeseen damages to valuable assets.

Tip: Always opt for comprehensive policies that cover both natural and man-made calamities.

The Role of a Good Insurance Advisor

While understanding these policies is important, choosing the right coverage is where most people struggle. This is where a good insurance advisor or sales person (BQP/POSP) becomes invaluable.

Why you need one:

• Helps you assess risks based on your life stage, income, and responsibilities.
• Suggests the right coverage amount instead of simply selling a product.
• Keeps you updated on new policies, features, and changes in regulations.
• Guides you during claims-ensuring smooth processing without stress.

Unfortunately, many people buy insurance randomly. The result? Under-insured or misaligned policies that fail during emergencies. A trustworthy advisor ensures your insurance portfolio is both adequate, efficient and the one that really protects you.

Sample Premiums

*Disclaimer: Monthly premium is for reference purposes only, actual plan may not have the facility of paying premiums on a monthly basis.

Conclusion

Insurance is not an expense, it's investing into your future, it's about financial preparedness. By including term life, health insurance (for yourself and your parents), personal accident, and vehicle/property insurance in your financial portfolio, you are setting up a strong safety net for yourself and your loved ones. Pair this with the guidance of a knowledgeable insurance advisor, and you can rest assured that no unexpected event will derail your financial journey.

Your financial plan is only as strong as the protection around it. So, review your portfolio today. Do you have all five? If not, maybe it's time to call your insurance advisor and get that safety net in place.

Disclaimer: Mutual Fund investments are subject to market risks, read all the scheme related documents carefully.

Friday, August 01 2025
Source/Contribution by : NJ Publications

In the past few weeks, India has witnessed a spate of accidents that have shocked the nation. From the tragic Ahmedabad plane crash landing incident that injured multiple passengers, to the unfortunate stampede during Royal Challengers Bengaluru's IPL victory celebrations, Mumbai local train and multiple reports of vehicles plunging into gorges in hilly states-these incidents are grim reminders of how unpredictability surrounds our daily lives.

While we often insure our lives, cars and health, Personal Accident Insurance still remains underutilized and poorly understood. Yet, it's one of the few covers that directly supports individuals and families when sudden mishaps derail everyday life. This article breaks down how a personal accident policy can be a financial lifesaver, especially in light of recent real-life tragedies.

A Personal Accident (PA) Insurance policy provides financial compensation in case of injuries, disabilities, or death due to accidents. Unlike a health policy that pays for hospitalization or a life policy that pays only on death, PA insurance covers a wider spectrum-death, permanent disability, temporary disability, fractures, burns, and loss of income due to injury.

Such a policy ensures that an accident doesn't result in both physical and financial disability.

• Financial Security for Your Family: In the unfortunate event of your accidental demise, the policy provides a (100% sum assured) lump sum to the family, helping them manage immediate expenses, clear debts, and maintain their lifestyle. This is particularly vital if you are the primary or sole earning member.

• Income Replacement during Disability: Accidents can lead to disabilities that prevent you from working, either temporarily or permanently.This is where the Loss of Income (Temporary Total Disablement - TTD) cover becomes paramount. If an accident renders you temporarily unable to work (e.g., a broken leg requiring months of recovery), this cover provides a regular income for a specified period, ensuring your household expenses are met even when your regular salary stops.

• Protection against Permanent Disabilities: If an accident leads to a permanent partial or total disability (e.g., loss of a limb or eyesight), the policy pays out a percentage (upto 50% - 100%)or the full sum assured, respectively.This compensation can be crucial for adapting to new circumstances, making necessary home modifications, or even pursuing new livelihood options.

• Worldwide Coverage: Many personal accident policies offer worldwide coverage, meaning you're protected whether the accident occurs in India or during international travel.This is especially relevant in a world where travel is increasingly common.

• Affordability: Compared to other insurance products, personal accident policies are generally quite affordable, offering substantial coverage at a relatively low premium. Sample Premium - Approx. Rs 21,000/- for 50 Lacs comprehensive PA policy for Self, Spouse and 2 kids.

Key Add-Ons You Should Not Ignore

1. Loss of Income / Temporary Total Disability (TTD) Cover

This add-on pays a weekly benefit (usually ₹25,000 to ₹50,000/week) if the policyholder is temporarily unable to work due to an accident. For salaried individuals, freelancers, or shop owners, this protects livelihood during recovery. It can be availed for up to 100 weeks, depending on the severity.

Example: A small business owner fractured his hip in a minor car accident. Though not hospitalized, he couldn't walk or operate his shop for 2 months. With a TTD add-on, he received ₹50,000 per week, totaling ₹400,000-critical to keep his business afloat and pay EMIs.

2. Fracture and Bone Injury Cover - A Must for Children & Elderly

Children and the elderly are especially prone to falls, injuries. As individuals age, their bones become more brittle, making them more susceptible to fractures from even minor falls. Yet, their injuries may not lead to hospitalization, meaning health insurance may not come into picture.

A dedicated fracture cover within a personal accident policy specifically provides a lump sum payout upon diagnosis of a covered fracture, regardless of whether it leads to a permanent disability.

• A 7-year-old injures her forearm while playing cricket.

• A 70-year-old grandmother fractures her ankle slipping in the bathroom.

In both cases, the insurer pays a predefined amount (e.g., ₹15,000 to ₹50,000), regardless of actual expenses. This helps cover diagnostic tests, consultations, splints, or physiotherapy.

Who Needs Personal Accident Insurance?

Everyone. But it's especially important for: Salaried, Self-employed, Housewife, Elderly, Children, Frequent travellers, etc.

Key Benefits to Look For

When choosing a PA policy, prioritize:

• Accidental death cover (₹50 - 100 lakhs or more)

• Permanent disability benefit

• Temporary disability (TTD) income support

• Fracture benefit

• Burns and disfigurement compensation

• Child education benefit (on policyholder's accidental death)

• No hospitalisation requirement for minor claims

Prevention is Good, But Protection is Better

We can't prevent every accident. But we can prepare for the aftermath. Whether it's a stampede, a holiday mishap, or a freak accident at home-Personal Accident Insurance offers the critical financial shield your health or life policy may miss.

In India's rapidly urbanizing and mobile society, where public events, travel, and daily commuting bring new risks, a personal accident plan is no longer a luxury. It's a necessity.

Talk to your Insurance Sales Person today to review your accident coverage-especially if you have elderly parents, school-going kids, or are self-employed. It's an investment in your safety and security that truly pays off when you need it most.