1) Type of Insurance you need: -
There are lots of
plans and keep on coming every day, you should know what is your need. As if you
want to secure your family after you or you don’t want to give any burden of liabilities
to your family you should go for Term Plan. If you want to plan your retirement
you should go for Endowment for longer time period (20-30years depends on your
age). And you wants to secure your child education than you go for money back
plans or endowment for short time period (like 15-18 years)
2) Buy your Insurance first than your child: -
Child
insurance is good thing but you take first your insurance rather than your
child. Take an example of a man who took insurance for his child but not for
him. If something goes wrong with that man’s child get nothing but a additional liability of the insurance premium. But he took insurance for him and something
goes wrong with him insurance is there to secure child future or else if there
something goes wrong with his child no extra money will be retired to the man
or his family though it’s a big loss but still no money factor involve in it.
3) How much cover you need :-
People make this
thing very complicated, No-one knows better than you that how much cover you
need you can find it in two ways first is on the basis of your expenses and second on the base of your
income
a)
Expenses basis-Its very easy way to find how
much cover you need. You should know your liabilities & Household expenses.
We take an example of 30 years old man who is only earning member of the
family. If His liabilities (home loan and car loan) and household expenses is
250000/- per year. Than he need to find an alternative for these expenses.
Simply multiply it with 30 (as in the age of 25 to 27 his child will be able to
earn livelihood for him/her and his/her family if get good education). If
somebody is taking care of your liabilities and household expenses than you
should not be worry about it. That’s what an insurance will do if you choose
the right one.
b)
Income basis –
Income basis is easy than ever you just need how much income your family
wants if you are not there to pay there bills. Let’s take an example of it.
Let’s say there is a man of 30 years and he is only earning member of the
family. Assume he is earning 360000 per year. He needs to secure at least 300000-360000
per year income for his family. Simply multiply 360000 into 20 years. This much
insurance he will be need to secure his family’s future.
4) Inflation
If you planing for your retirement
you should keep Inflation in your mind as inflation play very important role in
it. If you think 25000 is good enough for you after retirement than you should
be consider at least 2-3% Inflation rate per year and plan for at least 35000
per month return after your retirement. Let’s say if your planing your
retirement at the age of 40 and you thinking 25K is good for you but after 20
year 25k is might be equivalent to 18K or less than it. So it’s better to
consider inflation also while purchasing life insurance.
5) Be Sure You Can Afford the Premium:-
Premium should be affordable. Don’t invest in
only in single policy do 3 or 4 policy. In fututre might you not able to pay a
huge amount in one go than it’s a very difficult isn’t it? You can increase you
life cover when you need so buy insurance of current need but increase it
gradually.
6) There is no alternate for Life Insurance: -
In this world there is no alternate of
life insurance if you think you don’t need it you are wrong because nobody
knows how much life is left. So better you secure yourself if you want your
family should maintain the same standard of life which they living today. It
doesn’t mean that you only do life insurance but at least give your family
protection of the amount in which they easily survive after you.
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