Are you under-insured?
Akash and Varun, good friends and mid-level executives at an IT firm were part of a financial planning survey conducted in their office. On being questioned regarding his life insurance status, Akash informed about two traditional and one ULIP policy that he holds with a cumulative sum assured of Rs 15 lakhs. Like many people, he had mixed up his family’s financial protection and investment needs leaving them highly vulnerable. Varun smiled at the naivete of his friend. He had kept his life insurance and investment needs separate. For life insurance, he had a big term insurance policy of Rs 1 crore. However, the smug look on his face was soon replaced with a shocked look because after asking both questions regarding their future goals, current liabilities, investments and family responsibilities the surveyor had concluded that both were under-insured. Wait. It is a no-brainer that Akash was under-insured but Varun? After all, he had a term policy of Rs 1 crore. How...