Are you DEATH - PROOF ?????

The topic death proof!! Really sounds something different is not it!

As Napoleon Hill says death is one of the top 6 fears which force human being inactive …. And people generally cannot succeed in their life for this fear.

To succeed or to get financial freedom in life we need to counter the fear of death ….

Is this possible to win over death in real world?????

Even I don’t know…. Still research is going on … and this topic is still debatable…

But death is hard truth for all of us! Sooner or later we will die …….

But how can one get insulated from this ….. You might have seen this seen in your family or in neighbor when somebody passes away, his/her near and dear ones cries around him/her…

Have you ever analyzed why these people are crying???

I will tell you …. When somebody passes away 2 things happened in real world for his family members

1. ·         Emotional Loss
2. ·         Financial Loss

Is not it!!!!

Emotional loss may or may not heal over a period of time…Sometimes with time this will get healed ….. Sometimes it remains forever… And even I don’t know how to cure this…

Somebody asked me then do you know how to cure Financial Loss????

I told yes to some extent if not entirely ….

How??

When in a family a person is earning, all the expenses of family generally made from his salary/business… expenses such as food , schooling of kids , house rent , Loan EMI and other expenses ….

If I will tell you to get similar amount of money you will get after the death of the person, will that solve your purpose J  (first smiley in the long pessimistic explanation)

How can that be possible?????

Have you ever heard about life insurances… like LIC, Kotak life, hdfc life etc….

Yes…

Then why a person does this?

Generally we get prompt reply as 80c tax savings …. J

What are other major benefits let me tell you …

As per investopedia website

The goal of life insurance is to provide a measure of financial security for your family after you die. So, before purchasing a life insurance policy, you should consider your financial situation and the standard of living you want to maintain for your dependents or survivors. For example, who will be responsible for your funeral costs and final medical bills? Would your family have to relocate? Will there be adequate funds for future or ongoing expenses such as daycare, mortgage payments and college? It is prudent to re-evaluate your life insurance policies annually or when you experience a major life event like marriage, divorce, the birth or adoption of a child, or purchase of a major item such as a house or business. 

Yes Boss!! In simple words calculate all the loan amount + (10-15) times of your annual salary should be your insurance amount…

For example-

Suppose You have a house loan of 30 Lakh and a car loan of 5 Lakh & your annual salary is 10 Lakh.

The ideal insurance amount should be as below

House Loan	30 Lakh
Car Loan	5Lakh
15 times of annual salary	150Lakh
Total insurance amount	185Lakh(1.85Cr)

Then you must take 1.85 Cr life insurance. In lieu of your death your family will get the 1.85cr from insurance company .After repaying car loan and house loan they will be left with 150Lakh rupees which is equivalent to 1.5 cr.

(Guys here I did not calculate the loan amount which you might have pay when you are alive….In that case the 1.5 cr amount will become more)

Suppose your family will make 1.5 Cr Fixed Deposit in Post office and will get 7 % interests on that, then they will be getting monthly Rs. 87,500.00……. This amount is far bigger than your monthly pay when you are alive… Your family can make ample amount of saving after daily expenses…

Really Life insurance should be called as "death insurance." 

Wow!!!!! Great I have never thought in that way….. J, my friend exclaimed!!!

Somebody asked another question, to get this much big amount of insurance we need to pay big premium… the guy again told me he is paying around 1,04,000 for a 40 Lakh traditional insurance….

I told this is the point where exactly we guys make mistakes …. Insurance products should not be used for investment purpose.. They should be used for pure insurance purpose…

Pay the same amount and take a term cover …

Rest of the amount of your saving you can either put in SIP mutual funds and/or in a PPF. You will be surprised to see huge return J

What is term insurance?

As per investopedia

Term insurance is a type of life insurance policy that provides coverage for a certain period of time, or a specified "term" of years. If the insured dies during the time period specified in the policy and the policy is active - or in force - then a death benefit will be paid. 

Term insurance is much less expensive when compared to traditional insurance. Unlike most types of permanent insurance, term insurance has no cash value.

No Cash value means if you are alive till the completion of the term , then you won’t get anything J This a thing where most of the people get trapped… and go for expensive traditional life insurance products..

It is always advisable to take a term cover at your earlier age as it will be cheaper for you…

Let me tell you my example …

When I was 28 years old I took a term cover of 1cr which cost me around 14k/year for 30 years

Suppose if i took 40lakh term cover then my premium would be around Rs 5600/-

if I had to put rest Rs 94,800/year in PPF for 20 years, which is guaranteed return, I would be getting a fixed return of Rs 55,33,888.82/- (Around 55.5 lakh )which is tax free J + 40 lakh life cover from insurance

(In the above calculation i took the assumption of Rs 7900/month deposit in PPF. If someone wish to make a deposit of Rs 94,800/year at a time in the month of April then return will be definitely more)

That means after 20 year I am getting additional Rs 15, 33,888.82/- (around 15.5 lakh )

40 lakh life cover I can continue here onwards for another 10 years with just Rs 5600/-

However after 20 year (for me at the age of 48years) if I have to go for a traditional insurance for 10 years for 40lac cover it would definitely cost somewhere around 50-60k per year.In that way another 55k saving per year from 20th year to 30th year with 40 lakh life cover :) :) :) 

For your information PPF is of 8.7% compounding interest.

Really Albert Einstein once told

 “Compound interest is the eighth wonder of the world. He, who understands it, earns it ... he who doesn't ... pay it.”

Dear friends my point is here to take right decision and take a control of your own future. Please don’t listen to any agent or any glamorous advertisement.

See this is your life and your money. Nobody can take care of this better than you J

So you are now death proof right!!! What do you say??????

I have all ears J