An average Indian insures herself or himself for Rs. 100,000 to Rs. 200,000. Now, ask yourself a simple question. In fact, even if you do not belong to the unfortunate above-mentioned category and feel that you have insured your life for an adequate sum, ask this question:

If you are the breadwinner in your family or a likely significant contributor to the household expenditure, is your life insurance amount sufficient to take care of your family’s lifetime needs if you pass on?

The answer more often than not is an emphatic NO.

How long could a spouse and other family members sustain their lifestyle on a Rs. 100,000 or Rs. 200,000 insurance claim payout? Keep in mind that you were the principal earning member of the family and you are no longer there to take care of them.

So, let’s start with a general rule of thumb:

You should insure your life for at least ten to twelve times your present annual income. This amount is considered to be adequate for a family to sustain themselves at present expenditure and lifestyle levels until they recover from the financial loss caused by the breadwinner’s absence.

However, if you use only the rule of thumb, you are not incorporating your present financial state i.e. your savings, actual and/or expected household expenditure, loans and liabilities, present insurance cover, etc. As a result, you may not get an accurate picture of what your insurance needs are.

In order to determine the amount of insurance that is adequate for you, use an Insurance Planner. This planner will help you with an easy step-by-step procedure to estimate your family’s financial requirements, taking into account your present financial condition. Once you are aware of the estimate, you will have a much better idea of the amount you must insure your life for.

However, life insurance cost could be lowered if you:

• Select a term plan that offers you no money in case you survive the term of the policy. This is the purest form of life insurance. It provides your family with viable income but offers no benefit on survival.
• Increase the period of your insurance. If you want to purchase an endowment plan or a Unit-Linked Insurance Plan (ULIP), increase the term of your insurance policy. Note however that this idea will not work for a pure term plan – longer terms mean higher risks and therefore higher premiums.
• Offer to pay premiums annually. The more premiums you pay in a year, the higher will be your premium costs towards the policy.
• Do not purchase riders or additional benefits that do not add value to your insurance needs.
• Last but not the least – compare plans across insurers before you make a decision.

Term Plans: The insured will receive no benefits on surviving the term of the policy.

Return of Premium Term Plans: The insured receives the value of the premiums paid for the entire term of the policy.

Whole Life Plans: These plans typically offer no survival benefits, since there is no definitive term to the policy. However, the insured can make withdrawals or take loans against the cash value (the profit or bonus earned) of the policy. Some policies provide survival benefits if the insured lives up to the age of 80. Upon maturity of such policies, the insured receives the sum assured plus the bonus for the term of the policy.

Endowment Policy with Profit or Unit Linked Endowment Plans: In these plans, the insured receives the sum assured plus bonus/profit/guaranteed additions, if any. Unit linked endowment plans pay out the sum assured plus the value of the investments accrued over the course of the policy term.

Money Back Plans: During the term of the policy, you receive a tax-free, fixed portion of the sum assured at regular intervals. On maturity, you receive the balance portion of the sum assured, if any, plus the bonus/profit/guaranteed addition for the term of the policy, if any, or the value of the investments accrued over the course of the policy term.

Children’s Policies:The child receives the sum assured plus bonus/profit/ guaranteed addition, if any, or the value of the investments accrued up to that point in the policy term, at a pre-determined age. This money is receivable irrespective of whether the proposer, i.e. the parent/guardian survives the term of the policy.

In case of a money back policy, the child receives fixed portions of the sum assured at regular intervals. On maturity, the child receives the balance sum assured, if any, plus the bonus/profit/ guaranteed addition, if any, or the value of investments; whichever is higher.

An average Indian insures herself or himself for Rs. 100,000 to Rs. 200,000. Now, ask yourself a simple question. In fact, even if you do not belong to the unfortunate above-mentioned category and feel that you have insured your life for an adequate sum, ask this question:

If you are the breadwinner in your family or a likely significant contributor to the household expenditure, is your life insurance amount sufficient to take care of your family’s lifetime needs if you pass on?

The answer more often than not is an emphatic NO.

How long could a spouse and other family members sustain their lifestyle on a Rs. 100,000 or Rs. 200,000 insurance claim payout? Keep in mind that you were the principal earning member of the family and you are no longer there to take care of them.

So, let’s start with a general rule of thumb:

You should insure your life for at least ten to twelve times your present annual income. This amount is considered to be adequate for a family to sustain themselves at present expenditure and lifestyle levels until they recover from the financial loss caused by the breadwinner’s absence.

However, if you use only the rule of thumb, you are not incorporating your present financial state i.e. your savings, actual and/or expected household expenditure, loans and liabilities, present insurance cover, etc. As a result, you may not get an accurate picture of what your insurance needs are.

In order to determine the amount of insurance that is adequate for you, use an Insurance Planner. This planner will help you with an easy step-by-step procedure to estimate your family’s financial requirements, taking into account your present financial condition. Once you are aware of the estimate, you will have a much better idea of the amount you must insure your life for.

Would your savings be sufficient to take care of your family’s needs from then on?

Life insurance is a tool that can reduce that risk. It replaces your income in the event of your not being there to take care of your family.

Therefore, the most common reason to buy life insurance is to provide your family for the sudden loss of your income. The proceeds from a life insurance policy could be used to support the financial need of your family members.

So, yes, you need life insurance. The only factor that you need to consider is how much life insurance you need.

Now that are aware of the need to be insured, buy an insurance policy as soon as possible. The logic of calculating life insurance premium is simple – the younger you are, the lower the premium you will have to pay. Another aspect you will need to consider: the younger you are the higher insurance cover you will need to make up for the productive years lost in the event of your passing away.

Yet another point to consider is the term of your life insurance i.e. the period for which you intend to insure your life. Here too, the younger you are the longer you need to provide for adequate risk cover benefit for your family. Even if you are 40 years old and not yet insured, the insurance plan you choose needs to be for the long term – at least 20 years, assuming conservatively that you will provide your family with your income till the age of 60. Thus, for the duration of your future productivity, you have ensured your family’s financial welfare even if you were to pass on at any time during that period.

• Your age, gender, health, occupation and hobbies
• The type of policy you select
• The sum assured i.e. amount you choose to insure yourself for
• The term i.e. number of years you propose to remain insured
• The premium paying term i.e. number of years you choose to pay premium
• The mode i.e. frequency with which you choose to pay premium (single payment, annual, half-yearly, quarterly, monthly or via the Salary Saving Scheme)
• The riders i.e. additional benefits you select, their term and premium paying term.

Here is an example of a term life insurance plan for a 30-year old male.

Typically, a term plan for a sum assured of Rs.10 lakh for a duration and premium paying term of 30 years costs about Rs.3,430 per annum. In the event of death of the policy holder during the term of the policy, the nominee receives the sum assured immediately. If the insured survives the term of the policy, she/he does not receive any money.

There is a variety of life insurance policies out there – some offer a refund of the premium to the insured while some offer a portion of the sum assured. There are yet others who offer the full sum assured to the insured at the end of the term. The trick is to ensure that your insurance plan achieves the primary goal of providing for your family in the event of you not being there.

Accidents do not happen when you are driving a car, or away on a vacation. It may happen anytime & anywhere.
Considering that modern day life is so dangerous, a personal accident policy is a solution to such vagaries of life.
Its a Benefit Policy.

Coverages are -

• Accidental Death Benefit
• Accidental Permanent Total / Partial Disability Benefit
• Accidental Partial / Temporary Disability Benefit
• Broken Bones
• Burns

Travel Insurance / Overseas Medi-claim policy is a basic requirement when one travels abroad, either its for business,sight-seeing,shopping or pleasure.
This policy covers you for any kind of hospitalization which is very expensively priced overseas. Also covers for

• Baggage loss,
• Passport loss,
• Personal accident,
• Trip cancellation
• Home Insurance when you are travelling
• Dental Expenses
• Maternity expenses in life saving scenario etc.

It is a single policy which covers all unforeseen risks – medical & non-medical when one is in a strange place.
Options available -

1. Single Trip
2. Multi Trip
3. Student Medical
4. Senior Citizen
5. Pay per day basis

Home Insurance policy provides a cover to the structure and contents of your home from all unforeseen natural & man-made catastrophes.
It provides protection for property and interests of the insured and his family members.
It is imperative that you secure your home which gives one peace of mind protecting the most valued possession.

Coverages are –

• Fire & Allied Perils
• Burglary & Theft
• Electrical & Mechanical breakdown (Domestic, Audio & Audio-visual appliances)
• Public Liability (Third Party Liability)
• Covers Accidental breakage
• Coverage to building & contents
• Personal Accident to self & family