Friday 23 November 2012

Term Insurance Plan- Building a Solid Personal Financial Foundation


“World’s longest bridge is 4000 m across the sea and can withstand an earthquake of magnitude 9”.
“Chinese bamboo trees expand its roots for 4 years without any growth above the surface and shoots to a height of 80 meters in the 5th year”.

If we take the example of bridge, it takes years to build, with tones of concrete and steel bound together. A bridge is build over rough terrain, unbalanced surfaces and is made to suffer harsh weather. Yet a bridge never falls on the itself. It holds itself together and connects our world. It stands strong and unshaken.  A bridge… lives on because it was built strong. It’s foundation and planning makes all difference. A bridge represents our life. Without a strong foundation, the uncertainties of life can take away all the happiness and security we wish to offer our loved ones.

                             Importance of solid foundations at different stages of life
Foundations laid down during the earlier stages of life will secure the well being and progress that unfolds in the later stages of life since,  From Birth to Death, an individual has to cross different stages of life as follows:

Ø  Birth---- ---à
Ø  School
Ø  Birth + School
Ø  Birth + School + Career
Ø  Birth + School + career +Marriage
Ø  Birth + School + Career + marriage + Retirement-----------then-----à Death

One should ask themselves the  following questions to know exactly where they stand as of now.

a)      Have you saved enough?
b)      Are your loved ones financially secured?
c)       Do you see most of your aspirations come true?
d)      Will your family be all right in your absence?
As you answer these questions, you might realize that many dreams are still in the making. And many more, have not yet come to pass. The following are the dreams, most of us got in general:

Ø  Children’s needs like higher education, Marriage.
Ø  Personal needs like a Better lifestyle, Family vacations, Health expenses
Ø  Future needs like having a dream Home, Retirement savings, Car purchase etc..

But the point is “WHAT WILL BUILD A STRONG FOUNDATION FOR TOMORROW? “

It is very important to build a solid foundation and plan for uncertainties & future income. It is good to review dreams in the wake of uncertainties. An uncertainty may cause you a loss of income or wealth, and bring your dreams to a standstill. It is important how one is prepared to face the same? The following questions will make better understand of the topic.

Ø  How will you meet your daily expenses?
Ø  How will you pay for your child’s education?
Ø  How will you pay for your home loans?
Ø  How will continue with your life style?
Ø  How will you match your financial goals?

There are circumstances which are unavoidable in nature that affects your family’s financial future. Your income may be impacted by any of the following events:

1)      Premature death: Results in total loss of income.
2)      Accidental Disability: Reduces your chances of employment & hence income earning capacity.
3)      Critical illness: Puts you off the job for an indefinite and may consume major chunk of your income and savings.
4)      Hospitalization of you or a family member: Consumes your income and savings drastically.
Protection is the foundation of your family’s financial well being. Your dreams can stay protected and in time come true, if you plan for all contingencies today. By protecting your future, you take the first step to laying a strong foundation for you and your loved ones. Protection needs differs for different stages of life. The below given example make better understanding of the same.

Ø  Age 25-35( Young & Single)---à  a) Saving for wealth creation : Life insurance & Disability riders
Ø  Age 30-40(Married)----à a) Home Purchase b) Financial Millstones (buying a Car)  : Life insurance - Mortgage protection
Ø  Age 35-40(Married with young children)----à a) Saving for children’s education /Marriage : Life insurance -Health Insurance.
Ø  Age 40-50(with Grown up children)---à a) Start Saving for Retirement b) Health Care c) Mortgage Insurance: Life insurance-Health insurance.
Ø  Age 55+ (Retired) -----à Retirement Support Medical expenses.
You can invest in a protection plan and the cover will depend on your age, income, immediate & ongoing financial commitments, liabilities and other planned milestone expenses. The following equation will help explain this better:

Current Monthly expenses (Rent, Food, clothing, school fees, etc..)With assumed inflation rate + Outstanding Loans (on mortgages, auto etc) + Future Milestone Expenses (child’s Higher education, Marriage etc.)  - (Minus) - Existing Insurance + Current savings.

All insurance plans offer a life cover. It’s prudent to go for higher life cover that helps in building a solid foundation. A Term Insurance plan:

a)      Provide lump sum amount which can be used to  take care of regular life style expenses, life stage based goals, purchase of assets or payment of any outstanding loans.
b)      Offer the option to take certain money as income for certain period.
Accidental Disability Riders: Offer lump sum amount in case of disability due to an accident.
Critical Illness Protection Riders: Offer lump sum amount in case any of the critical illnesses diagnosed with.
To avail complete benefits and build a Solid Foundation for your family’s financial future, Term insurance plan with Accidental, Disability, dismemberment & Critical illness Riders is the best solution.


Disclaimer: The information given above are the result of personal readings of related genuine documents and personal understanding of the subject matter. This  is written to make the readers understand, how it is importance to go for Term Insurance plan . However, this blog is not responsible for any error or inaccuracy in the same.

Do mail/call for services of Term Insurance plan
Ravi Kumar
Sr. Sales manager
ING Vysya Life Insurance
MG Road, Bangalore-560001
           Ravi.sampige@gmail.com
Cell: 9844519872






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