When Uday Walked In
A Conversation on Term
Insurance
It was a Tuesday morning at Bharadhwaj
Investsmart. The gentle hum of the AC, clatter of keyboards, and smell of
filter coffee created the perfect setting for meaningful financial
conversations. Uday, a 27-year-old MBA, walked in hesitantly.
"I'm here to meet Mr. Vaidy,” he
said.
"He's stepped out for a client
meeting," said Sunil, a senior advisor at the firm. "But if you're
okay, I can help. What brings you in?"
Uday smiled. “I’ve been hearing about
term insurance lately, and I’m not sure if it’s worth it. I mean… I’m just 27,
single, no loans… Do I really need it?”
Sunil leaned back. “That’s actually
the best time to get it - when you're young and healthy. Let me explain."
He pulled out a paper and started
drawing.
“Term insurance is a pure protection
plan. You pay a small premium every year, and if something unfortunate happens
to you during the term, your family gets a large lump sum - the 'sum assured.'
If you survive the term, there's no payout. That’s why it’s so affordable.”
Just then, CA Srini, Vaidy’s elder
brother - a tax and wealth expert and a practising chartered accountant, joined
in.
“Mind if I add something?” Srini
smiled. “Uday - the claim your family would receive - if ever needed - is fully
exempt under Section 10(10D). Plus, the earlier you buy, the cheaper it is.”
Uday looked curious now. “But how much
cover do I really need?”
“Well,” said Sunil, “a thumb rule is
10 to 15 times your annual income. So if you earn ₹10 lakhs, you should aim for
₹1 to ₹1.5 crore in coverage. Factor in inflation, family needs, and any loans
you might take in the future.”
Srini added, “I often advise clients
to add riders - like critical illness or accidental death benefit. They’re
optional, but very useful. And always check the insurer’s claim settlement
ratio. You want to be with someone reliable.”
“I read somewhere about return of
premium options,” Uday asked. “Should I consider that?”
“It’s available,” said Sunil, “but it
costs more. Think of term insurance as protection, not investment. If you want
returns, there are better avenues.”
Uday paused. “Makes sense. I think
I’ll go for it.”
At that moment, Vaidy walked in.
Seeing Uday with Sunil and Srini, he smiled.
“Looks like you got the full
masterclass!” he said.
Uday chuckled. “Yes, and I’ve decided.
Please go ahead and start the process. I should have taken this earlier”
As he walked out, Sunil turned to
Srini. “It’s always satisfying to see someone make the right financial decision
early in life.”
Srini nodded. “One conversation can
secure an entire future.”
To sum up, term insurance may not give
you returns, but it gives something more valuable - peace of mind. Whether
you’re 27 or 47, it's one of the simplest, most effective ways to protect your
loved ones from life’s uncertainties. The best time to buy it? Before you
think you need it.
The content made available in this article is for general informational purposes only. While every effort has been made to ensure the accuracy and completeness of the content, it should not be considered as a substitute for professional consultation.
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