| Author |
Message |
basant
Admin Group
Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
|
   Posted: 26/May/2007 at 8:49am |
This thread did see some interesting posts last night but financial sense says that no insurance is necessary once you have the requisite networth. STill while we can do away with Life insurance we should have a health insurance (no logic here except to suggest that it lends mental strength). ALso that the doctors are charging more is the insurance company's headache and they calculate it while fixing the premium so if you want a Rs 1 lac cover take a 1.5 lac cover to adjust for over billing etc.
|
|
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
|
 IP Logged |
|
|
|
 |
|
smartcat
Senior Member
Joined: 29/Mar/2007
Location: India
Online Status: Offline
Posts: 4243
|
Posted: 26/May/2007 at 10:40am |
| STill while we can do away with Life insurance |
Can you clarify on this? Life insurance is not necessary for those with high networth or do you mean life insurance is not necessary for those without dependants?
Every magazine/article says life insurance is necessary because my dependents can have the same standard of living after I become swarg vaas. What is the formula to calculate the amount of life insurance required? For eg -
- A family of 4 has a monthly expenditure of Rs. 30,000. What should be the sum assured of the husband's (age 35) insurance policy (assuming wife is not working).
- Another example - A family's networth is Rs. 50 Lacs. What should be the husband's insurance sum assured?
|
|
IP Logged |
|
|
|
omshivaya
Senior Member
Joined: 06/Sep/2006
Location: India
Online Status: Offline
Posts: 5966
|
Posted: 26/May/2007 at 10:50am |
|
Very good questions smartcat jee.
|
|
The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it
|
|
IP Logged |
|
|
|
basant
Admin Group
Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
|
Posted: 26/May/2007 at 11:02am |
Originally posted by smartcat
| STill while we can do away with Life insurance |
Can you clarify on this? Life insurance is not necessary for those with high networth or do you mean life insurance is not necessary for those without dependants?
Every magazine/article says life insurance is necessary because my dependents can have the same standard of living after I become swarg vaas. What is the formula to calculate the amount of life insurance required? For eg -
- A family of 4 has a monthly expenditure of Rs. 30,000. What should be the sum assured of the husband's (age 35) insurance policy (assuming wife is not working).
- Another example - A family's networth is Rs. 50 Lacs. What should be the husband's insurance sum assured?
|
|
|
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
|
|
IP Logged |
|
|
|
vivekkumar_in
Senior Member
Joined: 19/Sep/2006
Location: United States
Online Status: Offline
Posts: 606
|
Posted: 26/May/2007 at 11:13am |
|
I read somewhere, the question a prudent Life Insurance seller used to ask to his prospective client
" How long do you prepare to be dead ? "
Very thought provoking question. That will start putting things in perspective for how much should you have Life Insurance cover.
I do agree with Om ji that Term Insurance provides the max bang for the buck for Life Insurance. You will get max coverage, with less premium. Any other type of life insurance policy is waste & ULIP is criminal waste..
The intent of Life insurance is that your dependents should not see any change in their financial status by your loss....
Your coverage should be say 10 times your family's annual spending + Debts(House loans, auto loans etc) .. Ppl typically miss this debt component in this calculation.. In these days of sky high EMI , if you have not accounted this in the Life Insurance calculations, the dependents couls soon lose the home on the breadwinner's demise..
On health insurance front, I do think you need health insurance.. Coverage can depend on the age & no. of dependents you have..
|
|
Often we forget there's a company behind every stock,and there's only one reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.
P Lynch
|
|
IP Logged |
|
|
|
kulman
Senior Member
Joined: 02/Sep/2006
Location: India
Online Status: Offline
Posts: 9319
|
Posted: 26/May/2007 at 11:33am |
Om jee at his best due to Saturday night fever !!
|
|
Life can only be understood backwards—but it must be lived forwards
|
|
IP Logged |
|
|
|
champ123
Newbie
Joined: 03/Sep/2010
Location: Byelorussian SSR
Online Status: Offline
Posts: 7
|
Posted: 04/Sep/2010 at 6:33pm |
|
Yes health insuranceis really necessary for us. In future any problem than health insurance helps you.
|
|
IP Logged |
|
|
|
Monkey
Senior Member
Joined: 21/Aug/2009
Online Status: Offline
Posts: 770
|
Posted: 04/Sep/2010 at 8:08pm |
This is first time I came across this thread. I think insurance is not really necessary in certain situations. For exmple, if a person has networth of 2 crores (excluding illquid investments like properties), why should he take health insurance of 3 lacs? Ideally, such person should set-up contigency fund of 3 lacs lying in 2-in-1 FD with a bank which can be immediately accessed at the time of need rather than paying premium to insurance company and get into whole hassels of making claims. With networth of 2 crores, setting aside 3 lacs should not be a problem.
Same is applicable for life insurance. If a peron has networth such that dependents can live off that money, life insurance is not required. My approach towards calculating life inurance need is to calculate annual expenses, multiply it by 33 (considering 3% withdrawl rate), deduct person's networth excluding self occupied property and add any liability like loans to it. The result is the amount of insurance required. This needs to be covered by means of a few number of term policies. This need needs to be reviewed every year.
Edited by Monkey - 04/Sep/2010 at 8:11pm
|
|
IP Logged |
|
|
|
Active Topics
Memberlist
Calendar
Search
Help
Register
Login
