Hello Readers!
It has been more than one and half a year since people all over the world are suffering from this COVID pandemic, and if we talk about how long it will last, it’s completely unpredictable. However, experts expect that the situation would be different and positive once a major part of eth population gets vaccinated completely against COVID-19!
During this COVID pandemic, the noticeable thing was individuals' realization about the importance of life insurance and health insurance. During the second wave, the uncertainty rose to its peak, the chance of getting infected and the happening of the unfortunate event was more. The situation got worse with the fear of not being able to do enough for your family on time.
Once again this pandemic has established the aspect that the future belongs to only those who stay prepared for it. And the best way to prepare financial protection for your family in your absence is to get them covered under term insurance! A term life insurance policy can make sure that your family can go on to live a decent life even in your absence.
Getting a term life insurance policy nowadays is so easy, you only have to plan it in the right way. Let us see how you can do it.
How To Determine The Right Cover?
Well, it is advisable that while you calculate the cover amount, consider it to be equal to 10-15 times your annual income. However, that doesn’t apply to every individual, because not every individual and family have the same requirements and the same standard of living.
So, what to do to, how to calculate the right cover amount? Your liabilities, current and future expenses, are the main factors that you must consider while calculating the cover amount.
What Expenses To Include?
As the main motive of the term insurance cover is to ensure financial protection to your family in your absence, thus while calculating the right cover amount, you must consider the day-to-day expenses, regular expenses, and utility bills. Along with that, some other expenses that you need to consider are the school or college fee of your kids, medical expenses of your parents, retirement planning of the spouse, and others.
How to reach the right cover amount? Take consideration into your current monthly expenses and the number of years your dependents would require monthly income. Do add the increasing inflation factor, and then estimate your right cover amount.
Include Your Liability Expense In Your Cover Amount!
It becomes difficult for a family member to cater to the financial requirements in the absence of their earning member, imagine in that situation if they have also to think about the hefty EMI payments that the person might have taken personal use. The situation would become worse, the family might have to look for options like selling their house or any other property just to repay the loan amount.
Well, you can save your family from falling into such situations. Then what you need to do, when you plan your coverage amount for your term insurance plan, you must consider outstanding debt and increase the cover amount in the term policy that you wish to buy.
There is no calculator constructed or any formula invested that can estimate the exact amount of life insurance cover for any individual. However, considering your expenses, assets, and liabilities can surely help you understand what the future holds.
Just remember, Time Is Uncertain And So Is Life, Only A Term Life Insurance Policy Is The Foolproof Preparation For Your Family Needs!
Keep reading our articles for more updates on finance and investment!!
For any kind of query you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.
Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).