Know how much insurance you need | Fusion - WeRIndia

Know how much insurance you need

insurance cover

Have you ever thought how much insurance do you need? Not every insurance plan is suitable for everyone. It depends on one’s own situations, responsibilities and financial needs. Taking sufficient life insurance is essential to face sudden mishaps or unexpected events in the family. Choosing right policy is important. Normally, traditional plans offer smaller cover and sometimes they cannot be afforded by the people with low incomes. On the other hand, pure protection policies offer better cover with lower premiums if the policyholders have good medical history and habits.

Premiums generally depend on age of the policyholders. Often policyholders get confused how much cover they need. As per experts, the insurance cover should be at least 6 to 7 times of the annual income of the policyholders. However, policyholders should also consider the inflation in the long-run. So, one should calculate the inflation adjusted value for his/her returns. Policyholders should also note that their number of dependents. The insurance cover should be big enough to meet the financial needs of the family till the dependent children become self-sufficient. If your spouse is also dependent, then the cover should also meet her retirement needs. If there are any outstanding loans, it should also be considered while proceeding for a policy.

Choosing the right cover is essential for a policy. And the tenure of the policy is equally important. Based on these, one can decide how much cover is essential to meet his/her financial needs and proceed accordingly.

Image Credit: Needpix (Free for commercial use)

Image Reference:

Leave a Reply

Your email address will not be published. Required fields are marked *