Should I buy a term insurance cover? | Value Research Since you are worried about your job safety, you should create a contingency fund that would cover your living expenses for at least six months
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Should I buy a term insurance cover?

Since you are worried about your job safety, you should create a contingency fund that would cover your living expenses for at least six months

I am 44, working in a private company. I am not on the rolls and my job is not safe. My wife is 36 and she is a housewife. I have a daughter (8 years). My yearly earnings are around ₹5-6 lakh.

  1. Since my job is not safe and I am already 44, should I buy a term insurance or any other insurance cover?
  2. If I need to buy a term insurance cover, how much cover should I buy?
  3. What should be the term of the policy - 20 or 25 years or till my daughter gets married.
  4. Suggest a good insurance company to buy the term insurance cover.
  5. I also want to buy a family medical insurance policy (2 adults, 1 child). Kindly suggest me good policy with minimum premium and good insurance company which will respond well in time of need.
- G Shrineevasan

Since you are worried about your job safety, you should create a contingency fund that would cover your living expenses for at least six months. This will come handy if you suddenly lose your job and it takes a while for you to find another one. You can keep the money in a bank deposit.

Since your wife and daughter are financially dependent on you, you must buy a life insurance cover immediately. You should buy a term insurance plan for this purpose. The quantum of cover would depend on your financial liabilities and future expense of your family. A simple way to calculate it is to add up your liabilitiies (loans, debt, etc) and the likely expenses of your family (you will have to provide for inflation) and subtract your assets (savings, income from other sources, etc) from it.

You need life insurance cover till you retire or until someone in the family steps into your shoes and bear your financial responsibilities. For example, if you think you need a cover only till your retire at 60, you can choose a policy term of 16 years. Or if you think you will still have financial dependents even after you are 60, you can opt for a longer term. Go for HDFC Click2Protect or Max life Online term plan. Both these companies have a high claim settlement ratio.

For a health insurance cover, go for a family floater policy like ICICI Lombard ihealth or Apollo Munich Easy Health Standard policy. Both policies offer life long coverage without sub-limits. Go through the policy document, brochure, insurer's website, carefully for details of the plan.


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