Each time you take a large loan – usually a home loan, sometimes a personal loan – buy a term cover for the full amount of the loan that you take. Suppose you take a home loan of Rs 80 lakhs. Buy a term cover of Rs 80 lakhs. Your bank may offer you a reducing cover policy whose premium is bundled with your EMI. Say no. It’s likely to be more expensive and there is another logic for buying a Rs 80-lakh cover. As your loan amount falls, you are growing older, doing better at your work. Your salary is rising; therefore the need for the cover is rising.
