Is Your Life Insurance Adequate Or Not?

Will the amount recovered from your an insurance policy be adequate for your family needs?

You need to analyse and review your life insurance plan to ensure if it will be sufficient for meeting all your family’s needs and cover all unexpected liabilities in the future including medical and other emergencies as well. Too little life insurance cover can prove to be financially inadequate for your family, especially in case of pre-mature or unexpected death of the policy holder.

If your plan does not bring back the sufficient amount to sustain your family, then you need to consider increasing the amount of your investment share in your life insurance policy and build a plan that provides adequate cover and value in the future.

There are several factors to consider while deciding the sum assured amount of term insurance plan. Some of the factors are:-

· Inflation: Increased inflation leads to price hikes, expensive services and unfavorable market conditions that directly interfere with an individual’s life to function smoothly.

· Loans and debts: Repaying all the loans and debts needs to be a priority of the planner. The family need not bear the burden of complying with liabilities and loans if the funds are well arranged in advance.

· Child’s education-: MaxLife term insurance plan explains that the insurance amount should be able to provide for your child’s education and higher education.

· Daughter’s marriage: To ensure that your family conducts necessary occasions like your daughter’s wedding without any sort of hassle or discomfort, ample funds are required.

· Maintain the existing standard of living: The insurance plan cover should be able to retain at least the same standard of living and fulfill the basic lifestyle needs.

· Other factors: life stage of the individual to be insured, risk profile and risk taking capacity, needs of dependents, disposable income and so on.

Keeping these factors in mind, it is preferable to keep a good margin of insurance cover.

Tips for investing in life insurance policies

Starting to save early will go a long way in increasing your profits through the power of compounding.

Calculate with the help of Human Life Value (HLV) method. Human life value is total capital value of the individual, i.e. what he will earn for the rest of his working span in life. So the insurance he will buy will depend upon an individual’s economic value.

It is important to find out if your insurance plan is the perfect fit for you.