The Indian insurance market is growing rapidly, with numerous life insurance companies working round the clock to provide insurance to Indians. Yet, despite years of progress, at least 988 million Indians  (75% of all Indians) are not covered by any form of life insurance. And even when they do have insurance, the coverage is not always sufficient. As per the analysis of governmental and market data, an Indian is assured of only 8% of what may be required to protect a family from a financial shock. 
Buying life insurance in whatever form is a great start, but the right amount of coverage is important too. The cover should vary with the kind of responsibilities and the number of dependents you have, and it should also decrease accordingly. Here are three stages when you should increase your life insurance cover whether through term plans or through insurance cum investment plans.
An increase in responsibilities
When you get married, your financial responsibilities increase. In India, insurance is still a male-majority market even though the participation of women has increased substantially in the past few years and women account for one-third of all policies purchased according to an IRDAI report . But with careful planning, you can ensure that both you and your partner update your life cover through whichever route that suits you (term plan, ULIP, etc). The rise in sum assured must be done with keeping the next few years in mind. For example, if you and your partner bring in together an income of Rs 1 lakh per month, your combined cover should be about Rs 1 crore.
Similarly, if you have bought a new home and taken a loan for the same, you should increase your cover by the size of the loan to ensure that the EMIs remain on time if something untoward happens to you.
When you have a child
Between 2008 and 2014, according to the National Sample Survey Office (NSSO) , the average annual private expenditure for general education (primary level to post graduation and above) shot up by a staggering 175% to Rs6,788 per student. The cost of education in India is rising much faster than inflation.  Estimated with the current scenario that the average cost of an MBA degree will be around 50-60 Lakhs (INR) until the year 2025. The cost for an engineering degree will be around 25-30 Lakhs (INR) by the same period. Similarly, the schooling cost will be just more than doubled by then.
In short, not only do you need to invest for your child early, but you also need to invest regularly and in the right avenues. One of the best ways to do so is to invest in a child plan as it will also give you additional coverage.
When you get a hike at work or change your job
Buy a cover based on our annual income, so it makes sense to update the same when you get a substantial hike in your job or you change your job and the new salary is much higher.
In fact, a good way of using the extra cash is to buy a pension plan (in case you haven’t started investing already) so that your retirement savings are set in place. A pension plan dedicated for your retirement should be started at the earliest so that you have enough time to benefit from the market’s cyclical runs and survive its bear periods.
When you work for an entity, your employer provides life cover to you & thus protection to your family, in case something happens to you. But if you are quitting your regular job and starting your own business, you must keep in mind that life cover provided by your employer, would cease to exist. Hence, it is extremely crucial that you update your life cover considering you have lost the protection provided by your employer.
Life insurance is an essential financial product. As you go through major financial milestones in your life, you should be aware of what your life insurance cover looks like, and consider updating it to align with your financial situation.
The aforesaid article presents the view or an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ before making any decision.
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