What amount of money should you have for you to say you’ve made it in life? If you can answer this well and in a realistic manner, you are all set to work and build your secure future.
In order to make that better future, you need to invest and, later on, invest more by increasing your income. Investment includes a wide variety of instruments for you to explore. From life insurance to health insurance, equities & mutual funds to debts and FDs, PPF, NPS and others. While many of us will look at all other options but forget to look at life insurance in general. Life insurance is a hedge to provide your family with the necessary sum they need to lead their lives in your absence. It takes away the stress of worrying about finances.
Life insurance provides coverage for your life against premiums you pay. You can get a life cover worth ₹1 cr for an annual premium of just ₹15,000. It’s reasonable for the value it provides. However, the premium is not fixed; it is dependent on a case-to-case basis.
Let’s decode the steps on how you can secure your future:
1. Understand what your needs are:
Knowing your needs will help you understand your future expenses. Needs can include anything from daily groceries to medical expenses, travel, and lifestyle expenses.
2. Calculating sum assured:
Sum assured that life insurance will determine what your family will get once you have passed away. Ideally, most people advise having a sum assured of 12 times your annual expenses. For eg. If you have an annual expenditure of ₹18 lakhs, your sum assured should be around ₹1.8 to 2 crore.
3. Create an emergency fund:
Whole life insurance will help you secure the future of your family in your absence, an emergency fund will be your saviour when your financial situation is in turmoil. Life insurance will enable your family to lead lives comfortably. While an emergency fund will ensure your life insurance premiums are paid in dire times, your lifestyle expenses, even though curbed, do not hamper your life.
4. Adding nominees to your life insurance policy:
Having a legal heir or a nominee is very critical in this fast-paced life. Couple that with keeping your nearest ones and trusted ones informed with your life insurance policy and all investments and debts. This saves them the trouble of looking for documents in your absence.
5. Add riders to your policy:
This is like adding toppings to your ice cream to improve it. Riders help you better your policy. From critical illness riders to disability riders, more can be added to the policy at an additional cost.
Apart from these points, investing in assets that grow and create wealth will be the ones helping you secure your future. Life insurance is that hedge which protects your family with a sum that helps them live life, fund expenses, and fulfil career and academic dreams. Get an expert’s advice to plan your future in a strategic manner.
