Feb 25, 2013, 07.44 PM | Source: Moneycontrol.com
YOU heard enough about why you should buy insurance. So you wake up one morning and decide to buy yours that day. And then, you realise, you have no clue where to begin. Well, how about here for a start.
Step 1 ' Evaluate your life insurance needs
An extremely popular product, life insurance offers a lot more than just tax planning and investment returns. You are afforded the ability to plan for unforeseen events that could adversely affect your family's financial profile.
Factors to consider
Your financial profile and needs are different from your neighbour's. The same holds true for your insurance needs. Your decision when going for insurance must revolve around the number of dependants and their financial needs.
Factors you should consider
' Wealth, income and expense levels of your dependants
' Significant foreseeable expenses
' Inheritance you would leave them
' Lifestyle you want to provide for them
How much insurance?
Obviously the above factors don't mean much unless they are quantified. A time-tested approach used by insurance and financial planners globally is the capital needs analysis method.
Calculate: How much life insurance do you need?