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Smart wealth income plan vs Term insurance
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02 Dec, 2022
by om
My parents are aged 52 and 55, Recently during their bank visit they bought the max life smart wealth income plan wherein they have to pay annual premiums for 6 years for guaranteed income for the nominee until the maturity also with an additional life cover of 11L,
Is this better than a term insurance or not considering they have one dependent ?
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Dear OM
It is a personal choice but do not consider insurance as investment product so your parents can not create smart wealth because returns will not be able to beat inflation.
Ideally , they do not need insurance at age 55 because financial responsibilities are over .
However , for all general public insurance , I always recommended insurance as saving tool because of reasons below ;
1. It is a compulsory saving each year .
2. It gives tax rebate and returns are tax free .
3. It also offers life cover .
So if your parents are not disciplined and not money savvy then it is a prudent decision .
They can supplement It with term if they have liability of loan , child or any other liability .
Hope this clarifies
Shailesh
Insurance Samadhan