Importance of having a life insurance policy:

• Insurance is essentially risk mitigation. In case of an eventuality, how well is the survivor
of the dependant is compensated financially and does not have to suffer any serious
changes in life style
• Term insurance policies are looked at as investment options but very few Indians actually
look at insurance this way
• An important metric to metric to measure the quantum of insurance required and hence
the premium is Human Life Value, which is essentially the future earnings of the individual
being insured
• In case the insurance amount is lesser in value than the HLV, then the individual is said to
be underinsured, defeating the purpose of taking out an insurance (at least partly)
• To sum it up, the point of taking out an insurance is risk mitigation.