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In Mahabharata, the great Indian epic, there’s a story of a Yaksha asking some intriguing questions to Yudhisthira. The story goes like this….
One day while living in exile in the forest, Yudhisthira finds that while attempting to drink water from a lake, all his brothers have been killed by a mysterious Yaksha (a celestial entity). When Yudhisthira arrives the Yaksha challenges him to answer all his questions or else face the same consequences as his brothers.
One of the questions was what is the most wonderful/surprising thing in the world and Yudishthira answers that the most amazing thing is that even though every day one sees countless living entities dying but no one can imagine him/herself taking that last journey!
See all the Yaksha questions here
I guess that’s why even though Insurance is an important financial product, people have a natural tendency to avoid it. Infact most of us cite the agents pestering and tax issues for taking insurance!
If you ask me, the following form the crux of my thoughts on insurance:
- First of all, you should never buy anything but term life insurance. Insurance as an investment is a great investment for the insurance company but a terrible one for you. If you want insurance, get insurance; if you want to invest, buy an investment. Don’t mix the two!
- Second, if you have no dependents and no spouse, don’t buy life insurance. Ever. Don’t let a salesman talk you into it.
- Next, the more net worth you have, the less insurance you need. This means that before you start thinking about life insurance, know what your net worth is. This is an important number for figuring out how much net worth you’re going to need.
For starters why don’t you check out the amount of insurance that you need.
Cross posted on Insurance Information in India which is the first blog off the Blogs201 stable
About Ranjan
He edits Personal Finance Online Resources, delivers Financial Awareness Workshops and has built a desktop RupeeManager.
Email: ranjan@ranjanvarma.com or Call on +919867755615
Hi, my age is 25 and most people engaged in financial domain keep advising me on investments and benefits of early start. Most also say they missed out golden opportunity and great returns.
Well to be very frank I will start investing in stock markets/equities/MFs/bonds etc. only after I have all my desired items (just bought a car, now doing trading, short term investing. saving etc. to do a down payment for my home and then there wont be any savings for at least next 6-8 years as the EMIs will be having 10-12 years horizon.
My take is these returns at the age of 50 doesn’t matter if you spent first 25 years in learning and dreaming and now have decided to do nothing till next 25 years
@Sunny I have no intentions of giving advice, even though I don’t use them myself!
But, everyone learns in his/her own way. Sometimes when we have an open mind, we may learn from others too!
Best!
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