INTRODUCTION

In Life Insurance we offer covers to protect the individual against the risk of “dying too early or living too long”.

Risk of Dying too Early

• Each individual has got a certain financial value attached to his life in the form of his earning potential.

• If he dies at a young age or during the time when he had an earning potential his family suffers a financial loss in the form of loss of his potential earnings.

• A lot of his obligations towards the family remain unfulfilled due to his sudden demise.

• This is called the Risk of Dying too early and it can be protected against by taking life insurance coverage.

Risk of Living too long

• Every individual plans his life & his sources of income to the best of his ability taking into account his life expectancy.

• Sometimes, despite the best of planning the individual is not able to provide for contingencies such as serious / chronic / prolonged illness for himself or his spouse which results in all the planning going haywire.

• If a person survives beyond his expected age his planned sources of income could diminish or become inadequate due to a variety of reasons.

• This could result in his not having money at the time when he needs it most and is not in a position to go and earn the same.

• We call this the risk of living too long and protect against the same by taking whole life insurance policies where withdrawals are possible as & when required or by taking Pension policies or annuities.