Jaya welcomed her new neighbours, Smita and Gaurav by offering them tea. They just got married and moved in to their new rented apartment.
Just when Jaya was sipping her tea, Smita looked at the picture of a Jaya’s late husband Shailesh. With a soft and concerned tone, Smita asked her, “What had exactly happened? And how do you manage?”
Jaya after reminiscing about her late husband replied to Smita.
“Shailesh and I were a perfect couple. We belonged to middle-class families and our joint income helped us plan our travels and buy our own home. After the birth of our daughter, we became even more responsible and put a financial plan for her education and security. We opted for a life insurance with a sum assured of Rs 30 Lakh. However, little did we know we’d need these investments sooner than later. Three years ago, Shailesh met with a sudden accident and our lives were shattered. Life is unexpected and we often realize how unprepared we are until a calamity strikes. The entire life cover amount was used to pay the outstanding home loan. But that didn’t end my financial worries. The life cover amount was not sufficient to meet household expenses and my daughter’s educational expenses. When we had purchased a life insurance plan, Rs. 30 lakh seemed adequate. However, we missed considering our future goals, liabilities, and inflation. This was because we didn’t take enough guidance.
Back then, if we had selected the right insurance plan with a higher life cover that would cover all our expenses and also provide additional security against accidents then we would be in a better situation today.”
After listening to Jaya’s story both Smita and Gaurav decided to settle on a term plan that provided them with comprehensive protection. Their earlier notion of saving on the premium amount was then scraped. They decided to adequately and calculate every financial liability, expense, and inflation. Gaurav decided to opt for a life cover which was 10 times more than his annual income.
We often have this notion of opting for lesser life cover just to save on premium amount. But this inadequate life cover is actually too expensive to be paid of in case an unfortunate event occurs.