Today my aunt called me and asked if I would be interested to take up a new insurance scheme as an investment. The schema gives both life coverage as well as returns after some years. I was skeptical but then decided that I did not want to go for any insurance. I personally have a good opinion on insurance but sometimes I do think if my thought is correct or not. About a year back the price of Term insurance had a great boom. Many people started thinking about taking term insurance. The main reason was Corona. Covid took the life of many people and especially of different ages. There was no limit to the disease. Everyone got affected and there were enough casualties and that's what triggered this thought.
I have to be honest I also thought that I should be taking term insurance for myself. I even started exploring what would be the cost and if it would be a great option if I do it for my wife first and then do it for myself. Yes, it was quite a journey exploring all these options. The main reason was that everybody was paranoid and wanted to leave some asset to the family if they leave this world because of an accident or a disease. The price of Term insurance also started increasing because there are so many claims. That was also a very good time for the companies and banks that were selling Term insurance.
Why I thought I don’t need term insurance?
Even though I was looking for so many opportunities to learn more about Term insurance, I thought I should not worry too much about death and how it is going to happen to me and what would my family do if I were gone. That’s some negative thought at its peak. I do understand that we should also be very careful about it but in my case, I thought that I should be having enough assets with me and enough cash flow with me that should continue even after I’m gone and continue helping my family.
I started focusing on saving up more money than paying premiums for term insurance. The insurance amount that everyone was expecting to have was 1 Crore from the unexpected death of someone. I thought I should instead earn that 1 Crore by myself and leave it to my family if at all I leave this world. Some of my friends still think that paying a premium for term insurance is very good and important. They don’t see that as an expense but as an investment in the safety of their family. I personally see that as an expense because this is not going to give me anything and even if it gives me something, it is going to happen only after I’m dead.
I finally decided that I won’t be taking any term insurance but instead focus on increasing my income streams to earn that one crore sooner. It would even be great if I can earn more than that and keep it at stake so that my family will have something even if I had to leave sooner. I know for a fact that this ideology works for me but it doesn’t mean that it will have to work for others too. I would say that every individual should plan accordingly based on how much they earn and if they would be able to afford term insurance or not.
Term insurance is mandatory for taking Home loans
Only recently I came to know about this. I was about to enquire about how home loans work and my friend told me that I have to take Term insurance if I’m taking a Home loan. I already decided that I would not be going for any Term insurance but then for Home loans, they have now made it mandatory. Now I have started thinking if I should be taking any Home loans or not. I have ultimately started hating everything connected to Term insurance now. I don’t know if this ideology is correct or not but I personally have different thoughts and think that it is not my thing.
If people care about safety, I would still say that they should go for the medical policy and term insurance if not for themselves, they should at least do it for their parents and other family members. The reason is that there have been tough times when I was in need of money to pay the hospital fees for my dad during Covid but I did not have anything in hand. I had to be dependent on someone to get the money. The good thing that happened was that almost 75 percent of the expenses were covered by the insurance. So insurances are good but people should choose them accordingly based on their need.
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