3 out of every 10 Indians are buying pure protection plans while life insurance ownership stands at 70% in India. There has been an increase in awareness coupled with an attitude change about insurance and its importance in preparing us for uncertainties in the future. However, there is room for improvement given that out of the 81% people who have a life insurance plan in metros only 50% are aware about the benefits of insurance coverage.
Most of us purchase a life insurance policy and expect it to last through a lifetime. However, the insurance cover bought earlier in life might not be sufficient as you go through important life changes that come with new responsibilities. In such a scenario, you might require an additional cover to ensure that your family can live a comfortable life even when you are not around. Here are a few life events which should alert you to enhance your life cover:
1. When you get married:Marriage comes with the promise of sharing your life together with your spouse and also financial hardships. If both of you are working, your combined income might increase, but so do your expenses. You might purchase a new car or have plans for your own home. Your life insurance policy should be sufficient to support your life partner financially. This might be when you might want to up your cover.
2. Having a child:The rate of inflation in education is estimated at 10 to 12 percent on an average. To top it, if you decide to put your kid in a private institution, you should be prepared to pay more. This holds true for both schools and colleges. As a primary breadwinner of your family you need to check if the life insurance plan taken by you can take care of the scholarly needs of your child without any interruption when you are not able to provide for them. If not, it is time to go for an upgrade.
3. Getting a raise:You got promoted after years of hard work that you put into your job. You now make more money than earlier and have an improved standard of living. Your expenses also increase proportionately. It is important to raise the cover of your life insurance if you purchased it when you just started earning. After all, the purpose of insurance is to replace your income so that your family can be financially independent even in your absence.
4. Taking care of your parents:If you stay with your aged parents who require medical care and are dependent on you for their day to day needs, it becomes imperative to hike your life insurance policy coverage keeping their future requirements in mind. Rising medical costs might make it difficult for your parents to manage their hospitalisation expenses and recovery should either one of them be diagnosed with a critical illness in a few years.
5. Retirement:Regular income during your working years helps you accumulate a corpus for your retirement years. However, once you are in your 50s, and the kids are either ready to get married or financially independent, the need arises to protect you and your spouse when you are retired. Enhancing your life insurance plan should be a priority when your spouse is not working and depends on you so that you can provide for them in their old age.
Life events such as the ones mentioned above should trigger you to rethink if you need to up your life insurance cover. To ensure this, it is important that your policy is flexible and allows you to modify it as per your needs. The iSelect Star Term Plan from Canara HSBC Oriental Bank of Commerce Life Insurance allows you to augment your cover at different stages in tune with your growing responsibilities so that you can realise important life goals.
You can even include your spouse at discounted rates to let them benefit with a cover for themselves as well. Not only this, you can choose from varied premium payment options as per your convenience.
You have the option to either pay only during your working years or for the entire lifetime. Add riders for additional cover and opt for benefits as per your requirements. Remember to revisit your insurance cover and hike it as you progress to different stages in your life to avoid jeopardising the financial stability of your loved ones in the future.