Chat Transcript

30 Apr - 10:00 hrs

PV Subramanyam | Financial Trainer

How much should you be insured for?

Chat Transcript

guest: Good morning sir, A professional with Rs. 5 lac annual income and having family of 4 (spouse & 2 children). How much should i be insured for future safely of my family? Thanks.

PV Subramanyam: it will depend on his EXPENSES, not income. Say his expenses are about Rs. 3.5 L per annum, he should have an insurance of about Rs. 35L - PURE TERM INSURANCE.

guest: Good Morning Mr Subramanyam. Im an NRI, famly of 4 - I would like to insure myself [for life and medical] and wife for medical. Please provide your views and schemes if you agree with the idea.

PV Subramanyam: Of course PURE TERM LIFE INSURANCE is a good idea. Cover for regular expenses, goals like education of children and oldage of spouse. 10 times your annual expenses should be a decent ball park figure to start with. Take it from the cheapest provider. As a NRI you could look at a US or UK player too...

guest: Sir, when we opt for an ULIP there are variants like Builder, optimizer etc, which gives us the freedom to choose what % of money we would like to allocate to equity (say from 100% - 20%). We can also switch from one mode to the other. How do we take advantage of this provision, in case of a rising and a declining market

PV Subramanyam: you need to have excellent fund management skills! Broadly when your goals are 20 years away you stay in equity markets, however if your goals are 3 years away you stay MORE in debt markets. Best of all surrender your ULIP, HOWEVER take a PURE TERM INSURANCE BEFORE you do that.

guest: Sir, in case of erratic income, if I am unable to continue paying my annual premiums, what is the best solution? Should we surrender the policy or is there some other alternative available?

PV Subramanyam: take a PURE TERM LIFE insurance policy with payment made on a QUARTERLY basis. This is really cheap, there will be no question of not being able to afford. If you already have a ulip or a classic endowment if you have paid the premium for 3 years or more, surrender it. HOWEVER BEFORE SURRENDERING take a pure term life cover

kishen90: the fdi in insurance has been increased to 49% from 26% in India.what development do we expect in insurance sector with this move?

PV Subramanyam: nothing much really. None of these have any implication for the aam aadmi. If you are working in a life insurance company, good for you, some new player may come and pay you better salaries. Otherwise nothing much.

guest: My Annual Income is Rs.5.00 Lacs. I have different Insurance with LIC total Rs.25.00 Lacs. Is it sufficient.

PV Subramanyam: difficult to say without more information like is spouse working, how many dependants, whether parents are well off, etc. However prima facie take a Rs. 25L TERM INSURANCE from the most inexpensive player.

guest: Hello Sir, I have various insurance policies of LIC which were given to me by my advisor - they include Endownment policy which charges a premium of Rs 23,509 for a sum assured of Rs 10,00,000 33 years payment. Is it worth continuing with these policies ? He said you get sum assured on maturity similar sum after death to dependant

PV Subramanyam: if you have paid at least 3 years premium SURRENDER it. However BEFORE THAT, take a pure term life insurance from the most inexpensive player like Ageon Religare...(please shop around for the least expensive!).

moderator: This chat has now ended. Thank you Mr. PV Subramanyam for sharing your views, and thank you viewers for your participation.

PV Subramanyam: Hi Readers...thanks for being there! hope your questions got answered!!

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