Term Insurance Vs Car Insurance: A Monetary Decision You May Regret

Rohan, a salaried professional was overjoyed when he brought a spanking brand new car for the comfort of his family. He made a plan immediately to take his family out on his first trip in his new car with his wife Payal and 5-year old daughter Pari for a drive to nearby hill station. They stop on the way to get some snacks. Rohan also buys a nimbu-mirchi and fixes it to the front of the car. Out of curiosity daughter Pari asks Rohan why was he tying the nimbu-mirchi to the car. To this Rohan replies, it will protect the car from anything bad happening to it. She innocently says, Papa I love you very much please buy one for yourself as I don't want anything bad should happen to you as it will affect us badly.

This gets Rohan thinking about his life and he thinks about the consequences to his family if he is not around. If anything happens to his car, it can be restored to its original state by claiming car insurance. What will happen to his family and finances if he is not around? Rohan does not have any insurance protection for his life and finances on which his family is totally dependent on and the privileges that they are enjoying from the income he is generating every month.

Insured your car, Great! But what about your life?

Like many people, Rohan insured his new car because it is a mandatory requirement as per Motor Vehicles Act, 1988. However, Rohan does not have any life insurance on him even though his stay-at-home wife and child fully depend on him. Just as his car needs protection against any accidents or damages through car insurance, Rohan needs to insure his life too for the sake of his family. Without him the newly owned assets would turn into liabilities and will ruin the family's future. Rohan's case is not alone, we all in our young age think we are invincible and nothing bad will ever happen to us. In fact, a term insurance cover is the cheapest and the most affordable way to protect your family's financial future but still it is ignored by millions of people in India. If a car gets destroyed in an accident it can be replaced by a new one but if a life is gone it can't be replaced.

Let's compare car insurance expense with term insurance expense.

• Premium of INR 10,000 considering a non-smoking male in his early thirties.

• Premium of INR 20,000 for a comprehensive cover for a new hatchback car costing between INR 5 to 6 lakhs.

The above figures are indicative and for a more accurate premium calculation, we suggest you use insurance premium calculator on the website.

Two times the protection in case of an accidental death

Nobody knows when and how we will die. A death of a breadwinner can shatter the life of dependents in the family. An accident can happen anytime and even after getting the best of treatment sometimes it is not possible to save a life. Hospital treatment for an accident victim can leave a huge bill for the family behind.

Term insurance cover with accident benefit is an add on which is a must these days. If there is a death due to an accident then the nominee will be eligible for double the sum assured amount.

So, if the policy holder had an INR 1 crore coverage, in case of death due to an accident the nominee will get INR 2 crore. The extra money can be used to pay any costly hospital bills or to tackle any unfortunate medical or any other emergencies that may arise to other family members due to the shock of death of a family member.

So, have a car insurance is a must according to the law but it is high time that we understand the importance of having a term insurance as well. Don't leave your precious life unprotected. A term insurance cannot replace a human life like a car insurance but it can ensure it re-instates the financial flow to keep the dependents lives moving.