A term insurance of Rs 1 crore may seem like a lot at present, but will the same amount be right in the future?
A term insurance of Rs 1 crore may seem like a lot at present, but will the same amount be right in the future? Probably not. Actually, this is nothing but a marketing trick of insurance companies. Because the amount of insurance is decided on the basis of your responsibilities, needs and future financial goals. How, we explain to you in 9 points-
Understand the needs of Akhil and Vinay
Imagine, 22-year-old Akhil has just started a job after completing his B.Tech. No debt, no family. In such a situation, what will Akhil do with the insurance of one crore rupees? But Vinay, 35, has a home loan, a wife and two children in his family. He would probably need more than one crore term insurance. In this situation, one crore insurance may not fit for both.
understand the most important thing
Term insurance is generally bought for a longer period. After the termite of inflation, how much will this amount of one crore be left. If inflation increases even at the rate of 5 percent, then after 15 years the value of one crore rupees will be equal to 48 lakh rupees.
assessment of future needs
The average cost of higher education in the country is increasing at the rate of eight percent annually. If the child has to study medicine. At present its cost is Rs 40 lakh, then after 10 years more than Rs 80 lakh will be required. In such a situation, as your annual income increases, keep increasing the term insurance cover in the same proportion to cover the inflation.
Take care of living standard
To calculate the amount of insurance that will be sufficient to provide financial independence to your family in your absence, you will have to keep in mind your daily expenses, estimated expenditure on your responsibilities and financial goals. Have at least the same living standard for your family as it is today.
Not only this, you should also make an estimate of your savings for how your family will be supported in the future. For this, calculate the total savings you have including stock market, mutual funds, FD or bank FD and estimate that it will be sufficient for the future of your family.
There are many websites and platforms from where you can buy insurance. You can also visit 5paisa.com, where you can know what will be right for you.
check sum assured
It is possible that you already have an insurance, but keeping in mind the things mentioned above, you should check the sum assured of your insurance cover. Once you estimate your expenses, add the effect of inflation to it. Then subtract that from your total savings.
no maturity benefit
Term insurance plans are completely vanilla life insurance products, that is, maturity benefits are not available in it. There is no doubt that this is pure insurance.
Under term life insurance plan, you get more cover for very less premium. Keep in mind, people who smoke or drink alcohol may have to pay higher premiums.
The policy term should be chosen wisely. The financial security of the family is affected if the term is short, while the premium can be expensive if the term is long.
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