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Ref. No. KLI/22-23/E-BB/492
Before purchasing life insurance, it is important to decide how much coverage you should get. Read on to know the deciding factors for minimum amount of life insurance required.
The innumerable memories we make life-long emphasises the importance of our life with our loved ones and how valuable the entire journey is. From handing over our first salary to our parents and getting married to funding our children’s education and planning retirement with our spouse, we work hard to make each experience memorable and fun-filled. Although these experiences are all we need to feel better, the unpredictable nature of life is what makes them all the more significant and treasured.
The safety, security, and well-being of our near and dear ones are at the top of our priority list, and the primary goal is to ensure that they have a bright future with a solid financial backup in the case of our unfortunate demise. As a result, buying a basic life insurance policy is a good place to start, but we must also decide the minimum amount of life insurance required to fulfil these goals.
This is a question that we should ask ourselves while buying a life insurance policy- what is the minimum life insurance policy?
Determining how much money our family will require is an important element of buying a life insurance policy. It basically refers to the bare minimum life insurance policy sum offered to our family in the event of our demise. While financial experts often recommend insurance coverage of at least 10 times our annual salary, insurance coverage requirements may vary from person to person.
The ability to provide a steady flow of income is among the most important features of our financial planning. In case we are the main caregiver for our family, we would need an insurance policy that offers sufficient payment to replicate our income for them to lead a comfortable life.
Ensuring that our family is able to maintain a basic standard of living is one of our top priorities. This is why life insurance is needed because it helps us safeguard our family against untoward situations, facilitating them in meeting all their basic necessities even in our absence. Therefore our current lifestyle becomes a critical factor to evaluate before buying a life insurance plan.
Any present or prospective loans, such as house loans, EMIs, school loans, motor loans, or personal loans, can be paid off using payouts received from a life insurance plan. Thus, while finalising the minimum amount for our plan, we should consider the debts and loans our family might have to pay in the future.
If we plan to buy life insurance, it is critical to understand how much and what type we need. We should assess our position and needs before going ahead with the purchase decision. It is advisable to make a list of our needs ahead of time while buying a life insurance policy to prevent being trapped with insufficient coverage or overpaying for coverage that we don’t require. To make the best decision, we must educate ourselves to get the best insurance policy available.
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
Features
Ref. No. KLI/22-23/E-BB/2435
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
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