Which term insurance is better for me? I am a 31 year old male. I am unmarried and plan to marry in the next 1 to 3 years. I plan to have children later and take a home loan in future. My current salary is 24.5 LPA. I already have assets worth more than 10 crore. My family members have lived beyond 75 years. My mother passed away at 40 due to brain stroke. I am considering two plans: Option one cover of 3 crore till age 75 Option two cover of 4 crore till age 65 Which option is better?

Ans: You can purchase a term plan from any good company and include your family in that. For health insurance , you can purchase a family floater. Both these policies will give you a decent coverage at lower premium.

Ans: Financial Overview
Current Status

You are single and retired.

No family or loan commitments.

Insurance Policies

Health insurance: Rs. 10 lakhs with Royal Sundaram.

Life insurance term plan: Rs. 50 lakhs.

Traditional insurance plans from LIC: Rs. 25 lakhs.

Annual insurance premium: Rs. 50,000.

Appreciating Your Efforts
You have a well-structured plan.

Health and life insurance cover your needs.

Insurance Review
Health Insurance

Your health insurance cover is Rs. 10 lakhs.

Consider increasing it to Rs. 20 lakhs.

This ensures better protection against rising medical costs.

Life Insurance

Your life cover is Rs. 50 lakhs.

Since you have no family commitments, this is sufficient.

Traditional Insurance Plans
Jeevan Tarang and Jeevan Amrut

These plans provide survival benefits.

Use these benefits to pay your annual premium.

Surrender Option

Consider surrendering these policies if needed.

The surrender value can be reinvested in mutual funds.

Investment Strategy
Mutual Funds

Actively managed funds can offer higher returns.

Consider SIPs in large-cap and balanced funds.

PPF and NPS

Continue with PPF and NPS investments.

They offer safety and tax benefits.

Disadvantages of Index Funds
Lower Returns

Index funds mimic the market.

They often yield lower returns compared to actively managed funds.

Lack of Flexibility

Index funds have less flexibility.

Actively managed funds adapt to market conditions.

Disadvantages of Direct Funds
Lack of Guidance

Direct funds lack professional advice.

Regular funds provide support through MFDs with CFP credentials.

Higher Risk

Direct funds can be riskier.

Professional guidance helps mitigate risks.

Emergency Fund
Maintain Liquidity

Keep an emergency fund.

Ensure it's equivalent to 6-12 months of expenses.

Liquid Mutual Funds

Consider liquid mutual funds for this purpose.

They offer better returns than savings accounts.

Action Plan
Increase Health Cover

Increase your health insurance to Rs. 20 lakhs.

Review Traditional Policies

Consider surrendering LIC policies.

Reinvest the proceeds in mutual funds.

Continue SIPs

Increase SIP contributions.

Focus on large-cap and balanced funds.

Maintain Emergency Fund

Keep a sufficient emergency fund.

Use liquid mutual funds for better returns.

Final Insights
Your current insurance and investment strategy is commendable.

Consider increasing your health cover for better protection.

Reevaluate traditional policies and focus on mutual funds.

Maintain an emergency fund for financial stability.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

Ans: Hello;

What is the approx current value of the 2 old flats?

I am presuming that you are not occupying any of these flats.

What is your current annual income, from business and other sources?

Do you have any healthcare insurance coverage for the family? If yes how much?

Based on your answer to the above queries, we can advise you suitably regarding additional life insurance.

Thanks;

Ans: » You Are Already Financially Strong
At age 31, having assets above Rs 10 Cr is a major strength. This means:

Insurance is more for income replacement and future liabilities
Not purely for wealth creation for dependents

But since you plan to:

Marry in next 1–3 years
Have children later
Take a home loan

adequate term insurance is still important.

» Important Observation About Your Options

Option 1:

Rs 3 Cr cover till age 75
Premium around Rs 83k

Option 2:

Rs 4 Cr cover till age 65
Premium around Rs 78k

Difference in premium is very small.

» Which One Looks Better?
For your profile, the Rs 4 Cr till age 65 option appears more practical because:

Higher cover during most financially vulnerable years
Your biggest liabilities and responsibilities will likely be before 60–65
By 65, ideally your assets and retirement corpus should be self-sufficient

Insurance need usually reduces after retirement if wealth creation happens properly.

» Why Age 75 Cover May Not Add Much Value
The longer cover till 75 sounds attractive emotionally, but practically:

At 65+, major liabilities may already be over
Children may become independent
Home loan likely closed
Existing assets may itself become large enough for spouse protection

So paying more for lower cover till 75 may not give meaningful additional benefit.

» Family Medical History – Important Point
Your mother’s early brain stroke is relevant.

You should:

Disclose family history honestly in proposal
Avoid hiding any medical details
Consider taking policy early before future health changes

This improves long-term insurability.

» One More Important Suggestion
Since you are an irregular investor currently:

Insurance alone cannot substitute disciplined investing

You should gradually build:

Consistent SIP discipline
Long-term diversified mutual fund portfolio
Emergency corpus separate from assets

This will reduce dependence on insurance later.

» Finally
Between the two options, Rs 4 Cr till age 65 looks more suitable considering:

Higher cover
Lower premium
Your strong existing asset base
Likely financial independence before 65

The key now is not only insurance selection, but improving long-term investment consistency before family responsibilities increase.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.linkedin.com/in/ramalingamcfp/

Ans: »Your Financial Position

You are already in a very strong financial position at age 31. Having assets above Rs.10 crore at this stage gives you a very different insurance need compared to most people. That itself is highly appreciable.

Since you are unmarried now, your present insurance need is low. But your future plans of marriage, children and home loan will increase your responsibilities significantly over the next 5 to 10 years.

So, your decision should focus more on:
– Protection during family responsibility years
– Loan protection in future
– Long-term income replacement for dependants
– Health and family history considerations

»Understanding the Two Options

Option 1:
– Rs.3 crore cover till age 75
– Lower cover amount
– Longer protection period

Option 2:
– Rs.4 crore cover till age 65
– Higher cover amount
– Shorter protection period

»Which One Looks More Practical?

For your situation, Option 2 appears more practical and efficient.

Reason:
– Your biggest financial responsibilities are likely between age 35 and 60
– That is the phase when spouse, children education and home loan obligations may exist
– A higher cover during this critical earning period is more meaningful than lower cover till 75

By age 65:
– Most loans are generally closed
– Children are financially independent
– Retirement corpus is expected to be built
– Insurance dependency usually reduces sharply

So, from a protection efficiency angle, higher cover till 65 makes better sense than lower cover till 75.

»Why Cover Till 75 May Not Add Major Value

Many people emotionally prefer longer coverage periods. But practically:
– Insurance is meant for income replacement
– After retirement years, income dependency reduces
– If wealth creation is already strong, long-duration insurance becomes less necessary

In your case, because your current net worth is already high, extending insurance till 75 may not create meaningful additional value.

»Your Family Health History Matters

Your mother’s early demise due to brain stroke is an important point.

This does not automatically mean you are high risk. But it does mean:
– You should disclose family medical history honestly while applying
– You should avoid delaying insurance purchase
– You should maintain strong health habits and regular preventive check-ups

Taking insurance early at age 31 is wise because:
– Premiums are lower
– Medical conditions later may increase premium or create exclusions
– Future insurability risk reduces

»One More Important Insight

Even though you already have substantial assets, future liabilities may still arise:
– Home loan
– Child education abroad
– Lifestyle inflation after marriage
– Dependants becoming financially dependent on your income

So term insurance still has relevance. But you do not need excessive cover beyond practical requirements.

»Additional Practical Suggestions

– Prefer level cover instead of increasing/decreasing cover structures
– Ensure claim settlement process simplicity and strong service quality
– Avoid mixing investment and insurance together
– Keep nominees updated after marriage
– Review your coverage every 5 years after major life events

»Finally

Between the two options, the Rs.4 crore cover till age 65 appears more aligned with your life stage, future responsibilities and wealth profile.

The higher protection during your prime earning and family responsibility years is likely to create better financial security than extending a smaller cover till age 75.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

https://www.linkedin.com/in/ramalingamcfp/