If not you, who? | Value Research Raising children without buying term insurance jeopardizes their future. The cost of protection is unbelievably low

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If not you, who?

Raising children without buying term insurance jeopardizes their future. The cost of protection is unbelievably low


There's something magical about seeing your child for the first time. We treasure the moment because it soon transforms into an eternity of diaper changes and feedings. This is followed by school-runs, home-work and fights on the playground. We do our best, muddle along and if all goes well, our kids settle into good jobs and happy families of their own. The keyword here of course, is 'if.'

The hard-truth about children is that they cost money. Their up-keep, schooling and holidays cost money, as do the tuition classes, sports camps and visits to the local theme park. Your existence is their only source of income. You may have family who will take care of them on your death but banking on this is not a rational strategy. The generosity of an uncle or aunt is simply no substitute for the support that a parent provides. And what if the uncle or grandparent in question simply can't afford it?

So how much does term life insurance cost? The triviality of the figure is mind-boggling. A typical one crore cover for a 30 year old male non-smoker can cost less than Rs 1000 per month. This is the price of an hour of badminton coaching or that dinner you had last week at an uppity restaurant. The figure does change with factors such as age and location but the magnitude of cover available under term life insurance is still enormous (and beats other types of life insurance hands down). The premiums for it are also tax deductible under Section 80C upto Rs 1.5 lakhs.

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We do not usually count loan recovery cases among our top 10 worries. As long as we are alive and have a job, EMIs are a pain but one we take care of. This can change dramatically on our death. A lender can come between your child and his future. If you're a businessman, creditors can have the same effect on your estate. To this, there is protection available in the form of the Married Woman's Property Act (MWP Act). Term Life Insurance policies bought under this Act are held in trust for your wife and/or children. Money paid out under them cannot be seized by creditors. Making sure your policy is covered by the Act is not difficult. If you are buying insurance online, it can be as easy as ticking a box. However, make sure that the Act applies to your policy before you buy it. You cannot add it subsequently.

How to buy
Buy term life insurance online from the insurer's website. This is both cheaper and saves you a visit from the gossipy agent uncleji in your colony.

*Assuming a 30 year old male with term insurance cover till the age of 70.

**Actual insurance premiums will differ according to factors such as your age, where you live etc. Use our rules as your broad guidelines rather than absolute prescriptions. Remember to shop around for the best deal and read the terms and conditions before buying.

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