LIFE INSURANCE: Term plan will help maintain current standard of living

My husband and I are both over 40 years. Both of us have purchased endowment and money back policies. Since we have repaid our home loan and we earn good salary and we also have good savings should we buy term plan? We have only one daughter and we are regularly saving for her higher studies and marriage. She is 11 years old. Please advise if we should buy a term life plan and if so, till what age? 
- Rekha Kambli

Yes, my advice would be for both of you to buy an individual term plan. The precise cover should range between 10 – 15 times your current annual income. The policy term should be till your respective retirement ages. The rationale for this is that the proceeds of a term plan aims to replace your future income, if some untoward incident were to happen to you. This ensures the surviving family does not need to compromise on their current standard of living.

What is the right age to buy a retirement plan?-I am 35 years old now and currently I am investing in mutual funds and Ulips 
- Suraj Gupta

The simple yet frank answer is, "the earlier the better; the cost of postponement can be detrimental". In other words, if you start early, you need to save lesser amounts to achieve a desired corpus, compared to starting later. At your life-stage, a retirement plan would cost you an investment of roughly Rs 18,000 per month to build a Rs 1 crore corpus (age of retirement assumed as 60).

The writer is deputy CEO, IndiaFirst Life Insurance

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