Most of us review our insurance covers periodically. Some important situations we change our insurance policies.
You also need to review your insurance cover from time to time in a bid to ensure that you are adequately insured and your dependants are taken care under any unforeseen circumstances.
For instance, in the early stage of life when you have just started off your career, there is no real need for life insurance. However, circumstances undergo a sea change in late 20's or early 30's when you mature and get married. Then you need to assess your risks and buy/review your policies, just to ensure that your coverage is sufficient for your new needs.
Listed here are some of the stages in life during which you need to reexamine your insurance needs:
Getting married, the birth of a child, and being promoted/ salary increase taking loan, Job loss..!
* Getting married
Your are recently married. Please, check if your spouse has life cover. If your spouse is an earning member, you would have to calculate a combined Human Life Value (HLV), the expected life-time earnings of an individual, and change the life cover accordingly.
After marriage one needs to review one’s coverage to take adequate life cover in a bid to protect one’s spouse and family from the risk of premature death.
Mr. Anil Rego, CEO, Right Horizons ( Bangalore based personal wealth management firm) Said, ''You can either avail of a joint-life cover or split the cover and buy individual policies in accordance with your earnings"
If your spouse (Husband/Wife) is not earning, the life cover should be nearly doubled.
If the spouse is working, then her income earning capacity also needs to be protected and if she is a housewife, she needs to be given adequate protection which could safely tide her over any financial crisis that might occur in the absence of the breadwinner.
At this stage some critical illness cover is also required, so as to cover one against any mishappening which may lead to non-performance of job for some time.
After marriage, you might want to make your spouse the nominee for your policies or change the nomination of your life insurance cover from your spouse's name to other family member after a divorce.
* Increase in Income/Salary Level
The life insurance cover should be increase every 3 or 5 years. Same time life coverage calculated according to the Human Life Value.
The thumb rule is to have a life cover which is nearly 10 times your annual income. So, reassess your life cover periodically and avail of an additional cover accordingly.
One can also get an individual health cover or take top-ups to increase the scope of an existing policy.
Also, your insurance cover should change with your age, lifestyle and financial goals.
* Take any loan
As the person grows older, he starts accumulating assets on loans, like buying a dream house or a car. However, this also increases his liabilities which acts as a trigger to go for a larger or new insurance cover.
If you take a Car Loan, Pesonal Loan, home loan. Then talk to your insurer and add a rider to provide extra cover. Otherwise, buy a term plan equal amount to the home loan.
* Having Children
You may need more life insurance to cover the cost of raising your children.
In health insuranc policy update the list of beneficiaries to include your spouse and children. In the family-floater health policy, spouse and children will be add easily.
For long-term goals like your child's education or marriage to take moneyback policies, which give periodic paybacks of lump-sum cash, for this purpose. Choose a plan which offers a waiver of premium benefit. This will ensure that the policy doesn't lapse if you are unable to pay the premiums due to some mishap. Your child's financial needs would be taken care of even if you are not around.
* Job loss..!
If you loose a job or your business venture runs into losses, you may not cutting down your insurance premium. Because, the cash flow decreases, any unwanted event happen, your family may Surfer. So, continues insurance premium. But, the same time, your financial position is very critical, you can consider surrendering a policy and reduce the coverage to tackle the situation. But, be prepared to pay the surrender charges and get a lower return if you are giving up the policy before the end of the lock-in period. So, use this as the last option.
You also need to review your insurance cover from time to time in a bid to ensure that you are adequately insured and your dependants are taken care under any unforeseen circumstances.
For instance, in the early stage of life when you have just started off your career, there is no real need for life insurance. However, circumstances undergo a sea change in late 20's or early 30's when you mature and get married. Then you need to assess your risks and buy/review your policies, just to ensure that your coverage is sufficient for your new needs.
Listed here are some of the stages in life during which you need to reexamine your insurance needs:
Getting married, the birth of a child, and being promoted/ salary increase taking loan, Job loss..!
* Getting married
Your are recently married. Please, check if your spouse has life cover. If your spouse is an earning member, you would have to calculate a combined Human Life Value (HLV), the expected life-time earnings of an individual, and change the life cover accordingly.
After marriage one needs to review one’s coverage to take adequate life cover in a bid to protect one’s spouse and family from the risk of premature death.
Mr. Anil Rego, CEO, Right Horizons ( Bangalore based personal wealth management firm) Said, ''You can either avail of a joint-life cover or split the cover and buy individual policies in accordance with your earnings"
If your spouse (Husband/Wife) is not earning, the life cover should be nearly doubled.
If the spouse is working, then her income earning capacity also needs to be protected and if she is a housewife, she needs to be given adequate protection which could safely tide her over any financial crisis that might occur in the absence of the breadwinner.
At this stage some critical illness cover is also required, so as to cover one against any mishappening which may lead to non-performance of job for some time.
After marriage, you might want to make your spouse the nominee for your policies or change the nomination of your life insurance cover from your spouse's name to other family member after a divorce.
* Increase in Income/Salary Level
The life insurance cover should be increase every 3 or 5 years. Same time life coverage calculated according to the Human Life Value.
The thumb rule is to have a life cover which is nearly 10 times your annual income. So, reassess your life cover periodically and avail of an additional cover accordingly.
One can also get an individual health cover or take top-ups to increase the scope of an existing policy.
Also, your insurance cover should change with your age, lifestyle and financial goals.
* Take any loan
As the person grows older, he starts accumulating assets on loans, like buying a dream house or a car. However, this also increases his liabilities which acts as a trigger to go for a larger or new insurance cover.
If you take a Car Loan, Pesonal Loan, home loan. Then talk to your insurer and add a rider to provide extra cover. Otherwise, buy a term plan equal amount to the home loan.
* Having Children
You may need more life insurance to cover the cost of raising your children.
In health insuranc policy update the list of beneficiaries to include your spouse and children. In the family-floater health policy, spouse and children will be add easily.
For long-term goals like your child's education or marriage to take moneyback policies, which give periodic paybacks of lump-sum cash, for this purpose. Choose a plan which offers a waiver of premium benefit. This will ensure that the policy doesn't lapse if you are unable to pay the premiums due to some mishap. Your child's financial needs would be taken care of even if you are not around.
* Job loss..!
If you loose a job or your business venture runs into losses, you may not cutting down your insurance premium. Because, the cash flow decreases, any unwanted event happen, your family may Surfer. So, continues insurance premium. But, the same time, your financial position is very critical, you can consider surrendering a policy and reduce the coverage to tackle the situation. But, be prepared to pay the surrender charges and get a lower return if you are giving up the policy before the end of the lock-in period. So, use this as the last option.
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