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This five-step guide can help you choose the best life insurance cover

Two individuals with the same income but with different personal and household circumstances may need very different levels of insurance cover.

March 26, 2018 / 10:36 AM IST

Rishi Mathur

How much of life insurance is enough for an individual? The real answer, as is true for most important questions, is "Depends on your or your family's situation". There are a few rules of thumb to help you figure what's the appropriate value of life insurance — in essence, they suggest a multiple of 8-10 times the individual's income. However, two individuals with the same income but with different personal and household circumstances may need very different levels of insurance cover.

It is best to get a trained insurance professional to help assess the specific requirements in your case. Below are a few pointers on the factors to consider while assessing life insurance requirements.

1. Replacement of income and maintaining lifestyle - The easy one since you understand your income and expenses. However, do note that in your absence, additional expenses may be required such as domestic help and child care requirements. Hence, work out a robust estimate of household expenses - both the 'with' and 'without' you scenarios.