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Know How Much Life Insurance Coverage to Opt For

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How Much Life Insurance Coverage to Opt
August 31, 2023
 

Buying a life insurance policy is one of the most important things one can do for themselves and their family. Illness can strike at any time, and it is always sensible to be prepared. But most of the times, people end up taking coverage that's either not sufficient or get over insured. This eventually results in paying more premium than required. Mentioned below are a few pointers to help you decide how much Life insurance coverage to opt for:

  1. Your income

    It is important that you take your current income into account while buying a life insurance policy.  Opt for a life cover that at least amounts to a value equal to 10 times your annual income or even 20 times your annual income. You will also need to account for inflation.

  2. Liabilities

    If you have a number of liabilities, make sure you opt for a higher sum insured. Your family should not be burdened with the liabilities. In case you have no liabilities, you can opt for a lower sum assured so that you can save on the premium amount also.

  3. Present needs of your Family

    When you invest in a life insurance policy, make sure it takes your family's financial needs into consideration.  The amount of money that it takes to run the household, pay for healthcare-related expenses that are not covered by the health insurance plans of your family members, educational expenses of children in the family, etc. will all need to be accounted for.

  4. Age when buying

    If you are a relatively young individual, you can opt to purchase a term life insurance plan, since these policies usually offer a high sum assured for a relatively low premium rate to young policy buyers. On the other hand, if you have many dependents and are looking to purchase a policy with frequent payouts, you can opt for a money-back life insurance policy with a suitable sum assured.

  5. Premium paying capacity

    Along-with household expenses, you might also have loans and other medical expenses. This may reduce your disposable income. Ensureto take all your expenses into account and opt for a sum assured with a premium charge that is both convenient to pay and affordable.

HDFC Life offers a wide range of insurance policies to help you plan your financial future. Choose the best for yourself policy as per the above points and secure your Family's financial future.

https://www.hdfclife.com/life-insurance-plans

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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