How to Plan Your Life Insurance Wisely
Post on 02-Jul-2015
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DESCRIPTIONChoosing a Life Insurance plan is a tough decision to make. The plans are to be made in advance after considering lots of factors. When the question is for the financial security of your loved ones, being extra careful is justifiable. There are many factors to be considered before buying a life insurance. For more details visit at http://www.bankbazaar.com/insurance/life-insurance.html
- 1. How to plan your Life Insurance wisely?
2. Factors to be Considered Before Buying a Life Insurance Age Dependents Life stages Annual income Lifestyle Expected future cash flows Retirement age Debt liability 3. Age The first thing to consider is your age. Its better to have a life insurance at a young age. The reasons could be low premium, lesser risk involved etc. So, planning a life insurance policy at your early days of employment would benefit you a lot. Later ages may involve higher risk, higher premium, lesser sum insured etc 4. Dependents Dependents play a vital role for planning a life insurance. You should plan your sum assured on the basis of number of dependents in your account. If you have a high number of dependents, your sum assured should be high indeed and vice versa 5. Life Stages Plan your life insurance according to the life stages of your dependents. Supposedly, if your children are somewhere between 15-18 years of age, their higher education would demand a high amount of fees or in later ages, their marriage would demand high expenditure or if your retirement is near, you need to plan wisely before choosing your sum assured. Your sum assured should be capable enough to pay for all these expenditures 6. Annual income You should plan your life insurance, keeping in account your annual salary. Its always some multiplication of your annual salary to find out a nearby amount of sum insured to be taken. For example- An individual running under 30 years of age, should take a sum insured as 8 times of his/her annual income 7. Lifestyle Plan your sum insured according to your lifestyle. To give a same lifestyle to your loved ones after your unfortunate demise, sum insured value should be high 8. Expected future cash flows Make a tentative budget of your future income. This will give you a rough idea of how much you can earn in future. This will help you in framing your life insurance policy 9. Retirement age Retirement age is such that would bother you a lot for your life insurance policy. If you are near to your retirement age then it is too late for you to take a policy. It is always preferred to take it at young age 10. Debt liability The sum insured should be cleverly chosen after adding all your present outstanding debts. This will help your family for clearing debts without any trouble, when you might not be with them 11. Plan wisely and live a secure life!