Hello Sir. I have applied for Term Insurance to HDFC Life (Click to protect Supreme) and medical checkup for that has been completed. Now after evaluating my occupation which is construction of Thermal Power Plant and where I need to work on heights, the company is not willing to grant me the option of Waiver of Premium on Critical Illness. Without this option they will give me the Term Policy which I have made for 30 years. I requested them to charge me any additional premium but grant the WOP on CI rider. But they will not. Should I check any other company or take the policy from them without the rider. Other rider of WOP on Disability has been approved. I'm 35 years old salaried with no smoking or medical history.

Ans: For Term Life Insurance, both HDFC Life and ICICI Prudential are reputable options. Consider your health condition and family medical history to ensure coverage.

For Health Insurance, choose a plan that covers thyroid conditions without a long waiting period. Opt for a comprehensive plan considering your upcoming MBA and job transition.

Ans: Assessing Your Current Financial Situation

Hello Jitendra,

I understand your concerns regarding your health and financial well-being, especially given your high diabetic condition and recent family loss. You've achieved a lot professionally, and it's commendable how you're taking proactive steps to secure your family's future.

Analyzing Assets and Liabilities

Firstly, let's evaluate your assets and liabilities. You have a significant home loan and a commercial property investment. Your wife has rental income and other earnings, which is a positive aspect. However, your outstanding loan needs attention.

Your prudent decision to not engage in habits like smoking or alcohol is commendable and can positively impact your health and financial stability.

Assessing Insurance Needs

Given your health condition, obtaining term insurance might be challenging. However, we can explore other options to protect your family financially. We'll consider leveraging your existing assets, such as PF, Gratuity, and NPS, to manage the loan and ensure financial stability for your wife.

Exploring Alternative Investment Strategies

While real estate isn't recommended due to its illiquidity, we can explore other investment avenues that align with your risk profile and financial goals. As a Certified Financial Planner, I suggest considering a diversified portfolio of mutual funds, considering your risk appetite and investment horizon.

Planning for Your Son's Future

Your son's education and settlement abroad are crucial considerations. We can devise a strategy to ensure his financial needs are met without compromising your retirement plans or your wife's financial security.

Mitigating Risks

Given your health concerns, it's essential to have a contingency plan in place. We'll explore options to create an emergency fund and optimize existing resources to cover medical expenses and other unforeseen circumstances.

Maintaining Positive Outlook

Despite the challenges you're facing, maintaining a positive attitude is admirable. Together, we'll work towards restoring your financial position and ensuring peace of mind for you and your family.

Jitendra, your proactive approach to seeking guidance demonstrates your commitment to securing your family's future. Rest assured, with careful planning and strategic financial management, we'll navigate through these challenges successfully.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Understanding the Situation

You want to buy term insurance. That's a smart financial move.
Your yearly income is below Rs. 3 lacs. This is causing issues.
You have a lumpsum amount available. This could be helpful.
The insurance company is hesitant to provide coverage.

Reasons for Insurance Company's Hesitation

Insurance companies link coverage to annual income.
They usually offer 10-15 times annual income as coverage.
Your low income limits the coverage they can offer.
They may worry about premium payment ability.

Options to Consider

Approach different insurance companies. Policies and rules may vary.
Look for companies that consider assets along with income.
Some insurers may consider your lumpsum amount as an asset.
Explore group insurance options through employer or associations.

Improving Your Insurance Eligibility

Try to increase your declared income if possible.
Include all sources of income in your application.
Show proof of your lumpsum amount as financial stability.
Highlight any future income prospects or career growth plans.

Alternative Insurance Options

Consider a smaller coverage amount that matches your income.
Look into micro-insurance products designed for lower income groups.
Explore combination of term insurance and health insurance.

Importance of Full Disclosure

Always be honest about your financial situation.
Hiding information can lead to claim rejection later.
Provide all requested documents to support your application.

Seeking Professional Help

Consult a Certified Financial Planner for personalized advice.
They can help find suitable insurance options for your situation.
They may suggest ways to improve your financial profile.

Balancing Insurance and Investments

While seeking insurance, don't neglect investments.
Consider investing some of your lumpsum amount.
This can help grow your wealth and improve future insurability.

Understanding Policy Terms

Read and understand all terms and conditions carefully.
Pay attention to coverage, exclusions, and claim settlement process.
Don't hesitate to ask questions before signing any documents.

Regular Financial Review

Review your financial situation regularly.
As your income grows, revisit your insurance needs.
Update your insurance coverage as your life circumstances change.

Finally

Your effort to get term insurance shows good financial awareness.
Don't get discouraged if one company refuses.
Keep exploring options and improving your financial profile.
Remember, some insurance is better than no insurance.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

Ans: Hello;

I feel no need to inform this to the insurer now since you acquired it after policy inception.

However you may update it to the insurance company sighting change in health status before next renewal.

Most likely renewal will get rejected or will be accepted without this condition.

Check on cardiac exclusive policies to cover your ailment.

Also keep an emergency fund aside as a safe provision in case any unforeseen situation arises.

Best wishes;

Ans: Your concern about getting life insurance without a regular income is valid. Insurance companies assess income to ensure you can pay premiums. However, there are alternative ways to secure life insurance.

Understanding Term Insurance Eligibility Without Regular Income
Term insurance is pure life cover. Insurers check income to prevent over-insurance.

Without a salary slip, other documents can help prove financial stability.

If you have assets, investments, or past earnings, some insurers may consider these.

Alternative Ways to Get Term Insurance
Income Proof from Past Earnings: If you have previous salary slips, tax returns, or bank statements, they can support your application.

Fixed Deposits and Investments: Large holdings in mutual funds or fixed deposits show financial capability. Some insurers may accept these.

Rental or Passive Income: If you earn from rent, dividends, or other sources, these can be used as proof.

Spouse’s Income: Some insurers allow a policy based on your spouse’s income if they are earning.

Lower Coverage: A lower sum assured may have relaxed income proof requirements.

Group Term Insurance: Some banks and organizations offer group term plans without strict income proof.

Are ULIPs an Option?
ULIPs combine insurance with investment. However, they have high charges and lower returns.

Compared to mutual funds, ULIPs offer less flexibility and lower transparency.

If insurance is your goal, term insurance is better. If investment is your goal, mutual funds are better.

ULIPs are not the best option due to their cost structure.

Other Life Insurance Alternatives
Endowment Plans: These offer savings with insurance, but returns are low.

Money-Back Policies: These provide periodic payouts but have high premiums.

Guaranteed Return Plans: These offer fixed returns but are not inflation-proof.

Whole Life Insurance: These cover the entire lifetime but are expensive.

Child Insurance Plans: If you have children, such plans can offer benefits.

Best Strategy for Your Situation
Prioritise Term Insurance: Try proving financial stability through tax returns, investments, or passive income.

Avoid Costly Insurance Plans: Traditional plans like ULIPs, endowments, and money-back policies give low returns.

Use Existing Assets: Show fixed deposits, mutual funds, or other holdings as proof of financial capability.

Explore Group Term Insurance: Some banks and professional groups offer such policies.

Ensure Emergency Fund & Health Insurance: Focus on securing a health cover and emergency corpus before life insurance.

Final Insights
Even without a salary, options exist to secure life insurance.

Term insurance remains the best choice for pure risk cover.

Investment-linked insurance plans like ULIPs are not ideal.

Using past earnings, investments, or spouse’s income can help in getting a term plan.

A certified financial planner can guide you based on your specific financial situation.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment