How Much Insurance Should You Buy? |
Posted: January 7, 2019 |
When we plan to buy term plan insurance, one of the biggest question that comes to our mind is, “How much insurance should I buy?” It is indeed a matter of great importance, as the decision that you make today will hugely affect the lives of your loved ones tomorrow. The aim of purchasing a term plan is to ensure a financial security for your family members in your absence in case, you suffer an untimely death. You as the earning member of the family, have to ensure that even if something happens to you tomorrow, your family doesn’t have to struggle to make their ends meet. Even in your absence, they should be able to maintain a certain standard of living and not make a compromise with their dreams. Thus, buying a term plan with an appropriate insurance amount is very crucial for your family. When you know they will get enough, you too would get peace of mind.
So, if you are confused about how much insurance should you buy, fret not. Though there is no magical formula that would help you reach that figure, there are many aspects that can help you in choosing the right amount in your term plan.
Your Present Income Your annual income is probably the first thing that you need to consider when buying a term plan. It is after all through your income that you would be paying the premium of the term plan that you select. Till a decade back, it was considered that the insurance you have must be ten times of your annual income. But, with the high rate of inflation and the ever-rising cost of living, the insurance that you warrant for must be at least twenty times of your present annual income.
Your Age
Lifestyle Expenses In today’s world, everyone likes to maintain a certain standard of living. It obviously depends on how much the family can afford. In difficult times, downgrading one’s lifestyle can be quite difficult. But, you need to calculate the amount that would be enough for your family members that would help them make their ends meet and also save them from financial struggles.
Liabilities Most of us today, have loans and debts as our liabilities. Though they are the need of the hour, you cannot let your family carry the burden. In your absence they would already be emotionally shattered, making them bear the burden of your loans can make their lives miserable. You, therefore, need a term plan that has a cover which would be enough to fulfil all your liabilities. You must consider these existing liabilities and accordingly plan the sum assured.
Premium When you buy a term plan, you are under the obligation to pay the corresponding premium amount according to the cycle of payment that you have selected. The premium that you pay is directly proportional to the sum assured. Most term plans are quite reasonable but here too you need to make the choice prudently. Yes, having a high sum assured is indeed the best thing for your family, but then you also have to be careful that the premium that you select should neither be too low neither too high. It should be affordable, so that you can make the monthly or annual payment regularly. Having a big amount that you aren’t unable to pay will lead to a policy-lapse and will do more harm than good. And on the other hand, not paying enough premium will not lead to a sufficient sum assured for your family.
Select the Appropriate Riders Max Life Term Insurance provides you with a number of options when it comes to riders. These riders help you to customize your term plan and enhance your cover in a lot of ways. Adding riders to your term plan can be done at the time of buying the term plan and also post-purchase. Max Life Term Insurance Riders such as Waiver of Premium Plus Rider, Comprehensive Accidental Benefit and the Partner Care Rider safeguard the future of your loved ones in case of an accidental death, disability, critical illness, waiver of future premiums.
Your Goals
Conclusion
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