The Importance of Life Insurance in Financial Planning: A Case Study of Himanshu Gupta

Noida-based Himanshu Gupta seems to have it all figured out when it comes to managing his finances. His stock investments have given handsome returns, his equity funds are top performers, and he bought a house just before real estate prices surged. However, there is a crucial aspect missing in his financial plan – life insurance.

Gupta, the primary earning member of his family, brings in almost Rs.2.2 lakh of the total Rs.2.7 lakh monthly household income. With a sizeable Rs.31.5 lakh outstanding home loan and another Rs.5.5 lakh loan for a car, his family would be left in a vulnerable position if something were to happen to him.

Experts emphasize the importance of life insurance in financial planning, as it protects all other goals. Amit Jhingran, Managing Director & CEO of SBI Life Insurance, highlights that 32% of respondents in a recent survey admitted they did not have sufficient life cover.

While pure protection term plans cost very little, many people find reasons to delay buying life insurance. Gupta, for example, understands the need for insurance but hasn’t been able to decide on a company to go with. This delay could prove costly, especially as premiums increase with age and the risk of developing health conditions rises.

It is crucial for individuals like Gupta to ensure they have sufficient life cover to protect their family’s financial future. Even those who have bought insurance may not have enough cover, like Dharmendra More, who is the primary earning member in his family but has a cover of only Rs.35 lakh.

While life insurance is important for most, not everyone needs it. Single individuals like Priyanka Joglekar, who have no dependents and sufficient assets, may consider other investment options like Ulips to build wealth.

In conclusion, the key takeaway is that life insurance is a critical component of financial planning that should not be overlooked. It provides a safety net for families in case of unforeseen events and ensures their financial security. It’s time for individuals like Himanshu Gupta to prioritize buying sufficient life cover to safeguard their loved ones’ future.