How much insurance is enough insurance for you?

How Much Insurance Is Enough Insurance

PNB MetLife India 18-09-2015 06:28:11 AM
How Much Insurance Is Enough Insurance

Achieving goals requires planning. While identifying goals is the first step, making provisions is the second. Financial planning is all about sensibly distributing available funds Insurance can help you secure these financial goals, and as such it is vital to know how much insurance is needed to safeguard these goals.

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Child Plans
Child plans help you make funds available for your child's education, marriage, or any other future plan. Though there are other aiding tools and methods available,  creating funds at the last minute may be impossible at time. Hence, being prepared will increase your chances of achieving your goals and those of your children.

Calculating Future Costs for Your Child
Calculating future expenses for your children will help you arrive at a number –which is the amount you need to plan for.

For example, if your child's school expenses will be Rs. 1 lakh per year for the next ten years, followed by college costs of Rs. 24 lakhs for three years, you should plan for a minimum amount of Rs. 34 lakhs.

Term Insurance
A term insurance policy can safeguard the financial interests of a family in the event the household’s income provider is incapacitated. With the right policy in place, monthly expenses, children's education costs, and monthly instalments on a property can be met.

Term insurance can be planned on the basis of assumed future needs. If you currently earn Rs. 24 lakh a year, which meets your expenses and lets you also save comfortably, then getting insurance for ten times the amount would be ideal to cover all.

Health Insurance
Being prepared for the worst is always beneficial, as one never knows when an illness may strike. If health insurance is in place, then this is no longer a worry.

Based on an individual's health and medical history, an adult between 20 and 35 years would need a minimum cover of Rs. 20 lakhs. The older the individual gets, the better it is to increase the sum insured, as with age we are more vulnerable and become more exposed to illnesses.