For long we had always looked upon life insurance policy as an investment instrument. But with so many private insurance players in the market, people have become more educated about life insurance products. These policies are no more treated as investment instruments and that almost everyone knows its pros and cons today.
Life insurance can be established into a broad spectrum of coverage. Depending on your financial situation, life insurance can be used for a variety of purposes. If you can afford, you can opt for policies which offer money back facilities or even long term policies that provide retirement plans, etc. The main purpose of life insurance can be listed as below, such as:
- An adequate amount offers a good cover to you.
- It also takes good care of your dependents or beneficiaries.
- Offers money back facilities which provide cash to the policy holders at different intervals of time.
- If your life cover includes investment option, it will provide financial support on the long run.
- Life insurance also offers pension plans.
Life insurance is also like auto insurance where you can buy a lot of it or not a lot at all. Life insurance differs from auto insurance depending on the type of policy you want to buy. You can pay a lot or very little for the same death benefit depending upon many factors. Though you should remember that the younger and healthier you are, the less you will have to pay for coverage. Life insurance companies love to have their policyholders hanging around for a long time.
So how much life insurance do you really need? It all depends. There are basically two kinds of life insurance, term and whole life. Term life only covers your life and is payable if a policy holder dies during the effect of the policy. Whereas whole life offers investment option to the policy holder. So what to buy also depends on your purchasing capacity you can afford for. One common benchmark to calculate how much insurance you need, your death benefit should be about six to eight times your annual earnings. But there are various other factors to consider otherwise like.
- Other source of income adds to your lifestyle which means you should keep these sources in mind while calculating your death benefit.
- The bigger the size of the family your death benefit has to be enough to be able to cover your whole family without problems.
- Keep in mind whether your spouse works or not and also his or her earning capacity now and in the future. This will enable you make an accurate calculation of how much you need to cover.
- Figure out the number of people who are financially dependent on you and for how long. This will help you decide how much coverage you need to buy. The more the number of dependents, the more expensive will be your insurance premium.
- Figure out the death benefits your family will receive from your work place if any. As it is many companies offer covers to its employees, thus it can also be a source of coverage to your dependants.
All benefits of life insurance policy you can take at one place policybazar.com. Where you can compare and buy life insurance policy. If any help require regarding to insurance you can call to call center available such special offers at 0124 457 67 77 and also see website:
http://www.policybazaar.com/life-insurance/life-insurance-india.aspx
