The answer is No, Nein, Nyet, Nahi, Nako, Vendam, Na. I am a linguist but there ends my vocabulary for the word 'NO'. In any language, and in any part of the world, there is no logic for buying life insurance for a person on whom nobody is financially dependant.

I have heard arguments like ‘What if my child is diabetic and cannot get life insurance later on?’ If this argument is taken to its logical conclusion, you should be buying a policy for at least a few crores, if you take inflation into account – and all companies will deny it. So do not bother.

2. Should I Buy Unit Linked Policies As Investment?

This is a very difficult question to answer. So I will split the answer into various parts. Find out how much is the amount that is getting invested and far more importantly what are the fund management charges? (also called asset management charges).

As a ball park figure, look for fund management charges lesser than 1%. You will find unit linked policies as well as index funds in that category. Choose only such policies immaterial of the upfront charges. If you are not comfortable with index funds, choose mutual fund ‘managers’ with an excellent track record.

3. Will I Really Get a Policy for 30 Years Where I Have to Pay Premium for Only Three Years?

A toughie! Every insurance salesman will be up in arms if I say no. I would still stick to my answer. You will have to pay for at least one third of the tenure of the policy. Which means if you take a 30-year plan be prepared to pay for at least 10 years.

Vanishing premium promises have resulted in a lot of vanishing policies in the US and Europe.

4. I Have Some Old Policies from Life Insurance Corporation. My New Agent Is Asking Me to Surrender Them. What Should I Do?

Well, the recent love for equities has meant equity haters have all become equity lovers. You need to anyway maintain a balance between equity and debt, so continuing your old LIC policies is not such a bad idea after all. Especially, if your policies have already run for 10 years, the chances are the premium that you may be paying may not be high compared to your current income level.

In a worst-case scenario, make it fully paid up – where you do not have to pay the future premium and a reduced cover continues to be available.