An essential part of financial planning is insurance planning. Just like financial planning, it is also specific to the individuals and their situation.
Insurance products available to an individual can be categorized as life insurance and non- life insurance.
Let’s talk about life insurance.
It is taken primarily for the financial safety of your family so as to ensure them a decent/good life even in your absence. A huge responsibility isn’t it?
However insurance is also seen as a way to save and invest. Some insurance policies include a saving component along with the risk protection. The premium collected will be higher, with one portion assigned for risk protection (insurance component) and the other for the saving component (investment component).
Life insurance products can be defined by the benefits that they provide to the insured (Insurance company is called insurer and the one who takes out the policy is called insured).
There are many types of life insurance policies. It should be chosen based on your needs and goals.
👉 Term Life Insurance
It is a pure risk cover product. It pays a benefit only if the policy holder dies during the period for which he/she is insured.
Term insurance premiums are typically low because it only covers the risk of death and there is no investment component in it. The 3 key factors to be considered here are-
• Sum assured (protection or death benefit)
• Premium to be paid (cost to the insured), &
• Length of coverage (term).
Various insurance co sell term insurance with many different combinations of these 3 parameters.
It is the cheapest form of life #insurance.
For a 25 year old male (Non-smoker) who wants to buy life cover of Rs. 1 Cr for upto 60 years age (term = 35 years), the monthly premium will range between Rs. 600-900.
Just imagine a security cover of 1 Cr for your family by paying just Rs. 7200-10800 p.a.
However the same cover for a 35 year old male (term = 25 years) will come at a monthly premium of Rs. 900-1300.
What’s the catch?
Take life cover as early as possible because that will lead to significant reduction in your total outflow in the form of premium plus you will also be covered for a longer tenure. A win-win situation.
👉 Life Insurance
Life insurance cover is must for a sound financial planning of a non-gov employee or a self-employed person atleast.
And now when it is pretty much clear that for a considerable time we have to live alongwith Covid-19, life insurance should not be ignored.
Insurance products available to an individual can be categorized as life insurance and non- life insurance.
Let’s talk about life insurance.
It is taken primarily for the financial safety of your family so as to ensure them a decent/good life even in your absence. A huge responsibility isn’t it?
However insurance is also seen as a way to save and invest. Some insurance policies include a saving component along with the risk protection. The premium collected will be higher, with one portion assigned for risk protection (insurance component) and the other for the saving component (investment component).
Life insurance products can be defined by the benefits that they provide to the insured (Insurance company is called insurer and the one who takes out the policy is called insured).
There are many types of life insurance policies. It should be chosen based on your needs and goals.
👉 Term Life Insurance
It is a pure risk cover product. It pays a benefit only if the policy holder dies during the period for which he/she is insured.
Term insurance premiums are typically low because it only covers the risk of death and there is no investment component in it. The 3 key factors to be considered here are-
• Sum assured (protection or death benefit)
• Premium to be paid (cost to the insured), &
• Length of coverage (term).
Various insurance co sell term insurance with many different combinations of these 3 parameters.
It is the cheapest form of life #insurance.
For a 25 year old male (Non-smoker) who wants to buy life cover of Rs. 1 Cr for upto 60 years age (term = 35 years), the monthly premium will range between Rs. 600-900.
Just imagine a security cover of 1 Cr for your family by paying just Rs. 7200-10800 p.a.
However the same cover for a 35 year old male (term = 25 years) will come at a monthly premium of Rs. 900-1300.
What’s the catch?
Take life cover as early as possible because that will lead to significant reduction in your total outflow in the form of premium plus you will also be covered for a longer tenure. A win-win situation.
👉 Life Insurance
Life insurance cover is must for a sound financial planning of a non-gov employee or a self-employed person atleast.
And now when it is pretty much clear that for a considerable time we have to live alongwith Covid-19, life insurance should not be ignored.
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