The Risk of Living Dead

I know the Title Sounds Scary (almost like a horror film). But this article could prove to be of utmost importance to almost all of us.

In our Basic Financial planning, we mainly focus on 3 risks

  1. Risk of Dying Early – We Buy a Term Plan to cover this risk.
  2. Risk of Living Too Long – We create a sufficient Retirement Wealth for ourselves to cover this risk.
  3. Risk of huge hospital Bills – We Cover ourselves with Mediclaim (Or Health Insurance) to cover this risk.

Apart from this, there is something called a “risk of living dead”, wherein a person is Alive, but he / she is in such a state that they cannot work and cannot earn any income. In such cases, neither they get money from their term plan nor health insurance (as health  insurance only reimburse hospital expenses).

Such situation may occur due to 2 reasons

  1. Accident –  Mr. John meets an accident and becomes handicapped. He is not able to work and his income stops.
Silhouette of handicapped Man sitting on wheelchair in front of a large  panoramic window in hospital,He is sad and lonely. Stock Photo | Adobe Stock

2. Critical Illness – Ms. Nazma develops a critical illness (like Cancer, Brain Tumor etc). She is not be able to work and earn similar income as earlier.

Guiding you through Brain Tumor
A Sick Young Woman with Stock Footage Video (100% Royalty-free) 25746680 |  Shutterstock

Both these situations are termed as “The Risk of Living Dead”.

How do we manage the Financial risk associated with this?

  1. Mr. John could have bought an accident cover policy. This policy would cover not only accidental death, but also cover Permanent Total Disability, Permanent Partial Disability etc due to accident. It would give a lumpsum amount to Mr. John in case of a mishap due to accident. This Lumpsum amount can help to supplement the income that Mr. John is not able to earn now. The cover amount should be ideally 10 times of the annual income of Mr. John.
  • Ms. Nazma could have bought a Critical Illness Cover Policy. This policy would cover all the major critical illnesses. It would give a lumpsum amount to the policyholder on the diagnosis of the critical illness. This Lumpsum amount can help to supplement the income that Ms. Nazma is not able to earn now. As soon as the amount is paid, the policy ceases. The cover amount should be ideally 10 times of the annual income of Ms. Nazma.

How to Choose the Right Company and Policy ?

There are several insurance companies which offer accident cover and critical illness policy . Below Factors should be considered before buying the policy :

  1. Scope of Coverage – What all Critical illnesses are covered, what all disabilities are covered.
  2. Exclusions – Are there any exclusions ?
  3. Claim Settlement Ratio
  4. Premium
  5. Ease of Service

While covering “The Risk of Living Dead” is extremely important, it could be a good idea to seek professional guidance if there is a confusion. The biggest mistake would be to procrastinate the same. The people who are suffering from these, had never thought in their dreams that this could ever happen to them.

Its always better to be safe than sorry !!

The Author Prof. Saurabh Bajaj (BE, MBA, FRM, CFGP, AFGP) is CEO with Nidhi Investments, Mumbai. His articles have a readership from 78 Countries across the Globe. He may be contacted on if you have any questions.

(The views mentioned in the article are personal opinion of the author)

Published by professorbajaj

Prof. Saurabh Bajaj is an Author, Mentor, Motivational Speaker and Wealth Planner. He has done his MBA from Narsee Monjee Institute of Management Studies (NMIMS) Mumbai, one of the top 10 management institutes in India. He holds the prestigious FRM (Financial Risk Manager) degree awarded by Global Association of Risk Professionals (GARP), USA. Till date, there are less than 15,000 professionals in the world, who have been honored with this degree. He has also been awarded CFGP (Chartered Financial Goal Planner) Certification by AAFM (American Academy of Financial Management). After his MBA, he joined J P Morgan, the second largest Investment Bank in the world. He has worked with J P Morgan as Risk Analyst for more than two years. Prof. Bajaj also holds an Advisory certification awarded by AMFI (Association of Mutual Funds of India). During his stint at Bombay Stock Exchange, he has handled Investment Management and Treasury operations of the BSE Corpus. He has set up an entrepreneurship venture in the field of Wealth Planning and Investment Consulting under the name “Nidhi Investments” and holds the profile of CEO. Prof. Bajaj sits on the Expert Panel of and as Investment Expert. He is actively involved in investor education through his blog which has a readership from 78 Countries all over the world. His articles are also regularly published in , , ,, and . He has been awarded the title of “Best Article Writer” from in Jan 2012 and has been selected amongst “Top 5 Technical Writers” from all over India in Feb 2013. He has been invited by various TV Channels like SPIN TV, CNBC TV18, UTV Bloomberg Etc for programs like "Expert Advice" , "What Markets Want ", "Budget Analysis" etc. He has been invited by Several organisations like Lions Club, Rotary Club, Agrawal Welfare Foundation, Rajasthan Mandal, Agroha Vikas Trust, Union MF, UTI MF, Arthamitra Gurukulam, Vidyalankar Institute of Technology etc for expert lecture on "Smart Investing", "Life is A Celebration", "Financial Freedom", "The Digital IFA" etc. He was ranked 8th Merit at All India level NMAT which got him selected for MBA programme at NMIMS, Mumbai. He did his MBA with Capital Markets as his specialisation. Soft Skills has become an inevitable part of every selection process and teaching learning process these days. The students from small towns and tier II cities, in spite of being talented and well equipped with technical skills, are seen struggling in the selection process. This is because of their lack of exposure to these soft skills. Mr. Bajaj has a zeal for training candidates to develop these skills and has been imparting the same on since last two years. This zeal and passion inspired him to set up his own firm called “Knowledge Circle” which aims to train candidates for soft skills. Till date, he has trained more than 5000 participants from over 220 organizations across various fields of soft skills. He has been associated with MSBTE (Maharashtra State Board of Technical Education) to conduct Soft skills training workshop for the faculties of Polytechnic Colleges in Entire Maharashtra (Mumbai Region, Pune Region, Aurangabad Region and Nagpur Region) since last 8 years. He has also been associated with ICAI (Institute of Chartered Accountants of India) for training CA Students on various topics related to Communications skills, Group Discussions etc. He was invited by Fr. Agnel Polytechnic College, Vashi for a motivational workshop for faculties. He was also invited by Vivekanad Polytechnic College for "Communication Skills and Email Etiquette" training for non-teaching staff. Apart from these, he has conducted “Capacity Building Soft Skills workshop for Faculties” at ITI Gunj, ITI Pusad, ITI Digras and ITI Umarkhed. This was the first ever soft skills workshop for faculties in the history of ITI’s in Vidarbha. He was also invited by Shivaji Education Society to conduct similar Soft skills workshops for the faculties and office staff of Shivaji Junior College Pusad, Shivaji High School Pusad, Shivaji Vidyalaya Belora and Shivaji Vidyalaya Bhojla. He has conducted training workshop on “Effective Presentation Skills” for the relationship managers of HDFC Mutual Fund, Andheri Branch, Mumbai. He has also been invited at College of Management and Computer Science, Yavatmal, College of Dairy Technology, Warud, B N College of Engineering, Pusad, B D College of Engineering, Wardha, College of Engineering and Technology, Akola, Dr.N.P.Hirani Institute of Polytechnic, Pusad etc. for the Guest lecture on “Developing Interview Skills”.

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