Advice from my seniors

[eggheadme]

Hello everyone
We had some bad loans and fell into the trap few years back but most have been closed yet some are still my Father is a govt employee so he didn't buy a term insurance but bought some insurance which takes 1 Lakh every year for 7 years and gives back 8× insurance premium and some bonus
I checked for term insurance when I heard this for 20× annual salary but it's premium is high what should I do should I tell my Father to leave the insurance and get term insurance (my father will retire this year and I am still studying he is the soul bread earner in our family and he took the insurance due to the loans left to be paid)

 

[TaxWiser]

Hello everyone
We had some bad loans and fell into the trap few years back but most have been closed yet some are still my Father is a govt employee so he didn't buy a term insurance but bought some insurance which takes 1 Lakh every year for 7 years and gives back 8× insurance premium and some bonus
I checked for term insurance when I heard this for 20× annual salary but it's premium is high what should I do should I tell my Father to leave the insurance and get term insurance (my father will retire this year and I am still studying he is the soul bread earner in our family and he took the insurance due to the loans left to be paid)

Go with Term Insurance and try to invest a small chunks in MFs also. Just tell your father that Mixing Investment & Insurance is the Worst Financial Decision a Person can make
And considering the past your father had made enough bad financial decisions by taking Bad Loans as mentioned by you.

Watch LLA videos with your father to make up his mind thus building up his Trust in your advice as I know the first thing he would say after hearing your advice in this matter is that "Focus on Your Studies and Leave all this to me"

 

[eggheadme]

I do get that but what are the cancellation charges and we have paid 2 lakh already pluses we have a loan of around 40k every month and term insurance is 14k if taken can you give some kind of road map

 

[TaxWiser]

I do get that but what are the cancellation charges and we have paid 2 lakh already pluses we have a loan of around 40k every month and term insurance is 14k if taken can you give some kind of road map

Let's break down your options and create a roadmap.

1. Understanding Cancellation Charges
- Check Policy Documents: The cancellation charges depend on the specific terms of the insurance policy. Usually, there is a surrender value after a certain number of years, but it might be less than the premiums paid initially.
- Contact the Insurer: Reach out to the insurance company to get the exact surrender value and any penalties for early cancellation.

2. Managing Monthly Loan Payments
- Current Loan: You have a loan with a monthly EMI of ₹40,000.
- Term Insurance: If you opt for term insurance, it will add ₹14,000 to your monthly expenses.

Watch the complete Playlist to extract the Core Knowledge that will sure help in your case as you might not get exact similar scenario.


3. Creating a Financial Roadmap
- Evaluate Insurance Needs: Term insurance is crucial for financial security. If your father doesn't have adequate coverage, consider the term insurance despite the additional cost.
- Budgeting:

• Monthly Income: Calculate the total monthly income and expenses to see if you can accommodate the additional ₹14,000 for term insurance.
• Cutting Costs: Look for areas where you can reduce expenses to manage the additional insurance cost.

- Investment


4. Action Plan

1. Contact the Insurance Company: Get details on cancellation charges and surrender value.
2. Review Budget: Adjust your budget to accommodate the term insurance premium.
3. Invest Wisely: Invest as per your Risk Appetite instead of focusing only on the goal
4. Monitor Finances: Regularly review your financial situation to ensure you're on track.

Initially you have to bear huge loss due to cancellation but it totally your and your's father decision whether to carry the burden of this ULIPs or Take the remaining chunks and start from scratch.
Just Watch all the mentioned videos till the end, you will get the desired Road Map on your own


Best of Luck

(Source: YouTube, Gemini AI)