Choosing a life insurance policy as per your salary is a crucial task. The cover amount (also known as Sum Assured) should be adequate to protect your financial goals. Apart from the right Sum Assured, you should select the right life insurance policy to help you achieve the milestones.
There are various types of life insurance policies for different financial goals. You can protect your life goals and create wealth with different types of policies
Below 30, Income up to Rs. 50,000 p.m., No Dependents
It is the age when you can start saving. It is also the age of living life to the fullest, and often you find your money getting over before the end of the month.
The key is to strike a balance between your earning and expenses. It will decide your financial status a decade later or even for a lifetime. A life insurance policy is a financial instrument that offers protection and savings avenues.
Consider the following types of policies if you earn up to Rs. 50,000 a month:
✓Critical Illness Cover
This will safeguard your parents’ savings if you have any medical emergency.
✓ Accidental Death and Disability Cover
If you work in a dangerous environment like mines, you must get this cover. It will pay compensation till the time you are not able to earn. In case of death, it will pay the nominee the death benefit.
✓ Term Life Insurance Plan
This plan is a must-have whenever you start earning. The earlier you start, the lower your premiums will be. This pure protection plan will protect your life goals. It pays your nominees the death benefit if something happens to you.
Depending on your situation, allocation to these plans may vary. Buy a term plan as early as possible.
Between 30 to 40, Income Up to Rs. 1.5 Lakhs a Month, Married
By this age, you should’ve already achieved many of the previous milestones. However, if not, ensure to meet all of them before moving to the life insurance plans in this age group. Also, there could be two scenarios here. First, you and your spouse are earning, or second, only you are the earning member.
Only a few aspects will change due to the income status of your family.
✓Increase your Mediclaim Insurance Cover
You should include your spouse in the same plan after getting married. Even if your spouse is working and has a separate insurance, it’s better to buy a family floater cover.
✓ Income Benefit Plan
Certain term life insurance plans offer this benefit. With this option, you can have an assured source of earning to assist you during your rainy days. For example, Canara HSBC Life Insurance iSelect Smart360 Term Plan offers a steady income benefit option. With this option, the policyholder will get a monthly survival income equal to 0.1% of the sum assured when they turn 60 years till the end of the policy term.
✓ Unit Linked Insurance Plan
Life insurance plans like ULIP allow you to continue investing beyond the initial five years. So, just in case you do not need the money five years later, continue investing and enjoy growth. Else, you can withdraw the funds completely tax-free.
✓ Pension Plan
Retirement is a far-off goal when you are young. But the money you invest now will provide maximum growth to your retirement funds. Thus, start now, even if small. The earlier you start investing money into a life insurance cum pension plan, the better it is.
Above 40, Income More than Rs. 1.5 lakhs a Month, 2 Children
Addition of children to the family completes the family’s existence and paves the way for a stable future. However, it needs significant investment planning.
✓ Investing in Child Insurance Plans
These plans safeguard the child’s future goals, like marriage and education. Child insurance plans have goal protection feature, which ensures that it continues until maturity in your absence.
The insurer will deposit all the due premiums into the policy on your behalf. Your family will receive a lump sum upon death, and the child will receive the amount you intended at maturity.
Life insurance is an essential part of an investment portfolio. It is an investment tool besides providing financial protection. Insurance is NOT expensive. However, not buying an insurance policy could prove to be pricey.Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised to exercise their caution and not to rely on the contents of the article as conclusive in nature. Readers should research further or consult an expert in this regard.