Insurance Truths

Many people are not interested in Term Insurance. Value Research online, puts one of the reasons given by the investors.
According to him, it works like a betting game. Let's say you insure yourself for Rs 10 lakh at an annual premium of just Rs 2,000. What it means, according to our reader, is that you are willing to bet that you would die this year and so willingly cough up Rs 2,000. The insurance company bets that you will not die and is willing to pay your family Rs 10 lakh if you do. If you survive - which, we're sure, you would really love to - you lose the bet and the insurance company walks away with Rs 2,000. If you win the bet, you know what happens.

This bet goes on over a period of 10, 15 or 20 years, whatever the term of the policy. And so, he concluded, that it goes against his faith to lay a wager on his life. That forced him to arrive at the conclusion that a policy which gave him a return would be a good option because he could view it more as an investment.


Value Research Online explains why this view is wrong with some maths, in "Insurance Truths".

I have already explained why Term Plans + ELSS is a better in "Insurance: Term Plan"