Life in the fast lane

When you’re 25 years of age and single, your `life insurance` requirement will be different from your human life value when you turn 35, and are married, and the parent of a child!

Aren’t we keep striving for raising our annual incomes constantly?

It is important for all of us to remember that our objectives will keep changing, depending on specific life stage and family conditions. It is, therefore, prudent to revisit our insurance calculations regularly and not see this as a one-time activity.

Need for insurance

Your family loses its income in the event of an unforeseen circumstance if you are the sole earner. Having understood this concept, one may want to know the purpose of knowing your most suitable insurance policy amount. Most families face financial difficulties due to insufficient savings and it becomes tough to meet regular expenditures in case breadwinner is not around.

Our human life value is estimated as the present value of all the future earnings you are expected to make for your loved ones. In other words, it is the estimated income you will earn until you retire. It also calculates the economic loss the family will suffer in case of an untoward incident.

Benefits which can be drawn from insurance

In case of an unfortunate incident, the insurance company will pay the policy benefits to the nominee. This will ensure their financial stability and help them meet their regular expenses, pay for children’s education, and repay any outstanding debt liabilities. Such a situation may be avoided by procuring adequate life coverage.

Life insurance is a financial tool which can help us creating a financial net for their loved ones in case anything unforeseen happens to the life assured. Having an adequate Life insurance policy is one essential part of one’s financial plan.

How much cover should you avail?

Normally financial planners suggest insurance cover as minimum 20 times the annual income of a person.  However, one must consider several factors in order to calculate the adequate insurance coverage needed. These includes:

• Current age and proposed retirement age + Present total savings
• All monthly expenses such as home, medical, lifestyle, food, education, and travel
• Future expenditure like buying a home, higher education for your children, and their wedding
• Outstanding debt liabilities such as home loan, car loan, or personal loan
• Current inforce insurance cover

Keep promises. Protect your loved ones. Be Insured.

A competent life insurance advisor can help you arrive at your life insurance requirements in changing times.