Who Will Care You When You Can’t Care for Yourself?

On a rainy evening, 40-year-old Priya Sharma sitting on her balcony sipping her favorite masala tea. Reminiscing about her late husband, a smile lights up her face, “I married my first love.”

“In Ajay, I found the perfect partner” she says to Reena, her close friend.

Both Priya and Ajay belonged to middle-class Indian families and after marriage, their double income meant they could travel the world and also buys their dream home. As a young couple, they set off to pursue their joint passion of travel and photography whenever they had time and resources. The birth of their daughter, Riya, helped put things into perspective. As responsible parents, they put a financial plan for her education in place after her birth. Priya calls it their smartest decision so far.

Both Ajay and Priya had always been smart with their money; they saved as much as they spent. After Riya’s birth, the couple bought a house in south Mumbai.

“Parenthood made us even smarter”, she laughs. They also got a life insurance plan, as Ashok was the primary breadwinner. The plan would pay a lump sum amount of Rs. 35 lakh to his family after his demise.

Little did Sharma family know that they would need these investments sooner rather than later.

“Two years ago, the unimaginable happened and I lost Ajay to a stroke,” says Priya with a faraway look in her eyes.

Life is unexpected and has its own way of surprising us. We often realize how unprepared we are only when a calamity strikes. For Priya, life took a sharp turn after Ajay’s demise.

Priya became the main provider, and had to take all the decisions for the family. She used the life cover amount that she received to pay a large portion of her outstanding home loan. Riya’s educational needs were met by the interest earned on her education fund.

But that didn’t end Priya’s financial worries. The insurance payout took care of the outstanding liabilities, but did not leave her with enough money to meet household expenses and future expenses like her daughter’s marriage, or her own retirement. When they had purchased the insurance plan, Rs. 35 lakh seemed adequate. However, they hadn’t accounted for future goals and liabilities before buying the policy.

Had Priya and Ajay selected the right insurance plan with a higher sum assured that would cover both liabilities and future expenses, Priya would be in a better situation today.

While buying a life insurance policy, it is recommended you choose a life cover of at least 10-12 times your annual income. Young couples, or even singles, should buy an insurance plan that will leave a financial cushion for their family in the future. If possible, both spouses should own a policy. Life cover should be revised on special events like birth of a child or loan taken for a home. If needed, it should be increased to ensure sufficient financial security.

“We live in times of uncertainty and the only way we can secure our future is by planning for the long term,” says Sushma.

If you have dependents or financial liabilities, then it is prudent to get life insurance and a term plan is the cheapest variety of life insurance policy available in the market.

Knowing the basic features of a term plan will certainly enable you to buy a product as per your requirement, budget and financial objectives. It is always better to be safe and secure than sorry.