|Author: Kailash Kumar 24 Feb 2016 Member Level: Platinum Points : 2 (Rs 2) Voting Score: 0|
It depends on both as payment of the premium as well as the future requirements will be based primarily on the existing income level. Depending upon the age, marital status, number of children, dependent parents and/or other family members etc. , future requirement is assessed after taking into account the future inflation also. A term insurance policy covering life must be taken first. Other kinds of insurance policies can be considered as an supplementary insurance.
|Author: Venkiteswaran. 24 Feb 2016 Member Level: Diamond Points : 4 (Rs 4) Voting Score: 0|
Insurance is a provision for future, a provision for a contingent liability. The contingency may happen or not, it is a provision we arrange due to sheer prudence.
Insurance is a provision for monetary compensation in part or full of a possible loss happening in future. It is for ourselves to decide what could be the possible loss or what should be the optimum compensation for the loss. That depends on various factors. If it is insurance on life of the main earning person of the family, then the unfortunate happening, the surviving family will suffer income loss. As one cannot predict one's life exactly insurance cover also cannot be predicted. So it depends on a prudent guess and positive hope that nothing untoward will occur immediately. So a reasonable period is guessed and approximate amount by which the family can pull on in the absence of the earning head is taken as insurance cover.
If a term insurance taken to cover a housing loan(liability insurance) should be the loan amount , so that the survivors do not inherit the loan liability.
But it also depends on how much premium can be paid without disturbing the essential expenditures.
Hence the outer limit for an insurance done prudently will be the probable loss and the optimum one will be the amount affordable by one's premium paying ability also.
There are certain thumb rules with regard to calculating insured amount. One such formula gives that one should earmark 6 % of his gross income for insurance. In addition 1% may be added for each dependant. Another one says that one should have a minimum cover of 10 or 12 times of present annual net income, at least.
|Author: Karthikeyan 24 Feb 2016 Member Level: Gold Points : 1 (Rs 1) Voting Score: 0|
It is one of the critical question for everyone. There are various factors need to be considered while taking an insurance policy. It is good to consider both the premium and your future requirements.
If you are working in any organization then you will covered with some insurance policy by your employer. In such cases, consider a policy which has different benefits from the one offered by your employer. Having two policies with same set of benefits is not a good decision.
Choose a plan based on your family structure. If you have children then select a plan which will satisfy their educational needs.
|Author: Mahesh 24 Feb 2016 Member Level: Gold Points : 1 (Rs 1) Voting Score: 0|
General rule of thumb is you need 10 times your annual salary. So if your annual salary is 5L then you need insurance of 50L. This also includes other assets and investments. So you have to work harder to pay for such insurance money. Also if you survive the term then you don't get the money at all. So you have to do a bit of diversification in other assets too.
If you are unsure about the term insurance then make sure that you are atleast taking the health insurance. This way you dont have to worry about paying to the hospitals in the emergency situation. You can also get family floater where you can share the health insurance with other family members.
|Author: Pravat Kumar Das 12 Mar 2016 Member Level: Gold Points : 2 (Rs 2) Voting Score: 0|
Normally a person should insured 60 times of his monthly earning.
Suppose a person is earning Rs 20,000 monthly then he/she should be insured of Rs 12,00,000 at least.
But people are not aware about the real insurance plan, they are avoiding to take high sum assured insurance because of higher premium, but a person can get insured of Rs 12,00,000 by giving premium of Rs 2,000 per annum by taking term insurance.
|Author: Poulami 15 Mar 2016 Member Level: Bronze Points : 2 (Rs 2) Voting Score: 0|
Yes, Mr. Mahesh is right that the general rule of the thumb is that one should take insurance cover of 10 times of his or her annual
salary income. However, I would like to add a note about the example he has given.
As per the example, if annual income is 5 lacs then you should go for sum assured of 50 lacs. However, many of us do not know that insurance premium amounts are not directly proportional to sum assured. In most cases, your premium will keep rising till your sum assured in 50 lacs, but beyond that, your premium will drop a little.
If you do the calculations, you will find that the premium for a sum assured of 49 lacs may be even higher that premium for sum assured of 55 lacs.
So keep that in mind when doing your cover calculation. If you get 5-6 lacs more cover by paying less premium, is not that better?
You might think why is it so. It is because if the sum assured is significantly high, it indicates the quality of life being insured. Hence, the insurance companies are in less business risk, and they offer a sort of discount in the premium.