Why is life insurance necessary and how much should it be? Current monthly expenses and future financial goals should be well known.
Why is Life Insurance Necessary | How Much Should It be
Table of Contents
Life insurance has a specific purpose. It provides financial security to a person’s family from untimely death. In India, people still feel hesitant about life insurance.
There is a lack of awareness about this. Today a large number of people do not have life insurance. Not having enough cover is also a problem.
The big question is what is the usefulness of life insurance, what should it be worth and when should it be taken?
To get answers to these questions, you have to ask yourself. The question is, what is your responsibility towards the family as an earning person? Often a person has many responsibilities.
They want to send their children abroad for higher education. They have to raise money for their daughter’s marriage. If they have a home loan, then they want to repay it in two or three years. Want to become a source of regular income for retirement
Nobody saw the time. God forbid that untoward happen to anyone before fulfilling these responsibilities. What will happen to these goals in the event of unto wardness?
Where will the money for them come from? Its only option is life insurance. With this, all your financial goals can be given a security shield. It protects the self-esteem of the family. They do not have to fall in love with others after the main earning member of the family.
What amount of insurance should be taken?
For this, accurate knowledge of current monthly expenses and future financial goals should be made. Adequate life insurance should be equal to our present and future responsibilities.
In this, home loan can also be considered as a liability of a person. In simple language, the sum insured should be 16 to 22 times of the annual income.
When does life insurance need to be taken?
The right time to take life insurance is when the person does not have any kind of responsibility. That is to say, the sooner life insurance is taken, the better it is.
Mortality factor increases with age as premium increases. Also, due to increasing health problems, there may be difficulty in getting the right life insurance.
Term plan is always a better option for life insurance. Under the term plan, a large sum-assured can be availed by paying a lower premium. With the help of this, life can be relaxed with the financial security of the family.