But in that case too, the old policies come in handy. However, often, new purchase of term life insurance for a higher cover is avoided. But it is not a wise decision, say most experts. “Term life insurance is expected to pay a sum which will support current lifestyle for the survivors in case of death of the life assured,” points out Kinjawadekar. If you do not review it and enhance it, it will fail to deliver, he adds. Let’s understand this with an example. Ajay bought a term life insurance of Rs 20 lakh when he landed his first job with annual income of Rs 2 lakh. Over last five years, he got married and become father of a daughter. Now he earns Rs 6 lakh per year and has a home loan outstanding of Rs 18 lakh. In case of an eventuality, the term life insurance can pay off the home loan outstanding.
For the original version including any supplementary images or video, visit http://www.moneycontrol.com/news/business/personal-finance-business/time-to-upgrade-your-rs-10-20-lakh-term-life-insurance-cover-2300767.html