Life Insurance

Life insurance is not investment. Its only objective is to compensate the loss of income arising out of the death of the breadwinner of a family. If he does not die during its term, the life insurance policy offers no benefit and, crucially, has no maturity value.

Most of us buy investment products for assured returns or potential value on their maturity. While buying insurance you should not make the same considerations you would while making an investment.

Specifically, pay no attention to the cost of the policy and the returns. If you focus on the potential returns from a policy, you will find yourself inadequately insured (see ‘Say ‘no’ to returns’, right). Focus on its cost and you might buy insurance from a company with a poor claim settlement history (see ‘Claim settlement,’ p60).

In this report we’ll explain to you why you should ditch any insurance policy with a maturity value, move on to a discussion on why the cheapest policy isn’t necessarily the best, and finally tell you why you should consider buying insurance online.