Who doesn’t love money boss ? If any agent is coming with a policy saying that you will get your money back, please don’t start jumping on it as soon as you hear.
Ask these questions first !!
- What policy am I buying ? Is it term or money back ?
- If it is money back, what is the sum assured amount ?
- What is the premium amount I am paying per annum ?
- What is the effcetive rate of return that I am getting for my money ?
Most of the agents will come up with money back policies, ask your dad, he might be the victim of it. So, what’s wrong with the money back policies ? If you are choosing money back policies, you are linking insurance with investment boss which is not the right thing to do.
In money back policies, sum assured will be very less, if you want to increase it, premiums will also shoot up for you. If it is a market linked instrument, will that returns are guaranteed that agent is promising ? No. Agents suggest money back policies because they will get better commissions and it’s easy to convince people saying that you will get insured & as well as your money is paid back.
If you take pure term insurance, you can take cover upto 1 Cr or 2 Cr depending on your income and needs, so that your family will not be under financial trouble under your absence in the future if something happens to you. If nothing happens to you, you will be losing little premiums which may not even matter you if you have taken insurance at early age.
Rather than linking investment to insurance, invest blindly in an index fund, for sure, you will not regret seeing the returns at the end. Thank me later !! Haha.
Last but not least, make sure that you are not lapsing your term policies by not paying on right intervals, plan your to-do lists and remainders perfectly.
