Do I need Life Insurance?
People who buy life insurance often ask themselves: “Do I really
need Life Insurance”? It is true that not everyone needs to have life
insurance.
Before you decide to buy life insurance ask yourself these
questions:
1.
Are you married?
2.
Do you have Children or you plan to have children?
3.
Is your family dependent on you for their financial
needs?
4.
Do you have parents who you have to support financially?
5.
Do you have a Mortgage for Home, Loan for your
car or an unpaid educational loan?
If answers to these questions is a NO Don’t bother. Life
Insurance is not for you. On the
contrary if you have answered ‘Yes’ to any of the above questions, you should
consider life Insurance.
Appropriate amount of Life insurance will ensure that your
loved ones are not left with financial hardship should you pass away (All of us
are going to go one day).
The question that arises next is how much life insurance do I need?
If you want to ensure that your family continues to have the same
level of financial security in your absence, then the interest from your Life
Insurance pay out should be equal to your monthly income. Given the interest
rates in the country today, you should insure yourself for about 12-15 times
your annual income.
How long should I have life Insurance?
This is a fairly simple question to answer. You should insure
yourself for your entire income generating life; in plain English until the age
of anticipated retirement. In India this usually up to the age of 60. If you
intent to work beyond that you may want to ensure yourself beyond the age of
60.
Remember the older you grow more expensive it is to buy life
insurance and your options are limited as well. Bottom line is that buy Life Insurance as soon the answer
to anyone of the questions above is yes if you don’t want financial hardship to
befall your loved ones in your absence.
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