Insurance Shock! How Many Crores Does Your Family Need?
Do you know? Every year in India, lakhs of people leave their loved ones and go away from this world. Many of them are such whose family is financially dependent on them. But do you know what is the biggest shock to their family after their death? Money!
Today we will tell you such a shocking truth that can save your entire family from financial crisis. We are talking about life insurance.
Insurance Shock, But a Good Shock!
Many people feel that paying insurance premium is a useless expense. But have you ever thought that if something untoward happens to you tomorrow, what will happen to your family? Household expenses, children's education, wife's future - all will come under question.
What Are Your Family's Needs?
Now the question arises that how much money will your family need? The answer to this question depends on you and your family.
- Do you have any loan left? House loan, car loan, personal loan - first calculate how much money your family needs to repay all these.
- What will happen to children's education? Children's school fees, college fees - have you made any plans for their future?
- Daily Family Expenses - household ration, electricity bill, children's needs - all these expenses will also have to be borne by your family.
Let's Understand with an Example!
Suppose you are 35 years old and you earn Rs 50,000 every month. Your home loan balance is Rs 30 lakh and you have two children whose school fees are Rs 50,000 per year.
How much money will your family need in such a situation?
To repay the home loan - Rs 30 lakh
For the education of children till 18 years (assume an expenditure of Rs 50,000 per year for 18 years) - 18 * 50,000 = 9 lakh
For the expenditure of Rs 50,000 per month for the next 20 years (assume an increase of 5% every year due to inflation) - This calculation is a bit complicated, but you can take the help of an online calculator.
In this way, you can roughly estimate that your family will need about Rs 1 crore.
But Is That Really Enough?
The Inflation Hit! How Much More Do You Need Than Your Needs?
The Ravages of Inflation!
we saw how much money your family will need. But have you ever thought that in today's era of inflation, even this money will not be enough?
What is Inflation?
Inflation means that the prices of things increase with time. That is, the thing that you can buy today for Rs 100, will be available for Rs 200 after a few years.
How Will Inflation Affect Your Life Insurance?
Suppose you took a life insurance plan of Rs 1 crore today. Now if inflation continues to grow at the rate of 5% in the next 20 years, then the value of this 1 crore rupees after 20 years will not be equal to 1 crore rupees today.
Let's understand with an example!
Suppose you take a life insurance plan of 1 crore rupees today. If inflation continues to grow at the rate of 5% in the next 20 years, then the value of this 1 crore rupees after 20 years will be equal to about 5 crore rupees today.
That means you should take insurance of 5 crores instead of 1 crore rupees!
This is just an example. In reality, the rate of inflation can be even higher than this. Therefore, you should review your life insurance plan from time to time and update it according to inflation.
How to plan according to inflation?
Estimate the inflation rate: You can estimate the inflation rate from government data or reports from financial experts.
Review your life insurance plan: Review your plan every 3-5 years and see if there is a need to make any changes.
Increase the premium keeping inflation in mind: If inflation is rising, you should also increase your premium so that your plan can meet the needs of your family.
Remember!
Inflation is an uncertain thing. No one can accurately predict what will happen next. So you should always keep a safety margin and take your life insurance plan a little higher.
How to Choose the Right Life Insurance Plan?
The Insurance Market is Full of Options!
Nowadays, the market is full of life insurance plans. Every company claims that its plan is the best. In such a situation, choosing the right plan can be quite challenging.
Tips for Choosing the Right Plan:
Understand your needs: First of all, you have to understand how much money your family needs. For this, you can keep in mind the things mentioned in start.
Make a budget: Decide how much premium you can afford. Keep in mind that the lower the premium, the lower the cover.
Understand the terms of the policy: Read the terms of the policy carefully. It contains information like how much is the cover, how much is the premium, is there any rider attached, etc.
Check the credibility of the company: Check the financial condition of the company and its customer service record. The policy should be taken only from a reliable company.
Talk to an agent: Talk to a good agent. He can help you choose the right plan according to your budget and needs.
Some Important Policy Terms:
Premium: You have to pay every year or every month.
Cover: The amount you get on the death of the policy holder.
Maturity Benefit: The amount you get if the policy matures and the holder is alive.
Riders: Additional covers that can be added to the main policy, such as accident cover, critical illness cover, etc.
Should You Take a Term Plan or an Endowment Plan?
Term Plan: It only provides cover. There is no maturity benefit. It is the cheapest plan.
Endowment Plan: It provides cover as well as maturity benefit. It is more expensive than a term plan.
Choose the right plan according to your needs!
If your main focus is only on cover, then a term plan may be good for you. If you want cover as well as savings, then an endowment plan may be a better option.
How to Claim Life Insurance?
What to Do in Case of an Unfortunate Event?
The main purpose of life insurance is that if the policy holder dies, then his family gets financial help. But do you know what is the process of making a claim?
Steps to Claim:
Inform the insurance company: First of all you have to inform the insurance company about the death. You can do this by calling the company's helpline number or by visiting their office.
Submit the death certificate: You have to submit the death certificate to the company. This certificate can be obtained from the local municipality or panchayat.
Fill the claim form: The company will give you a claim form. In this form, you have to fill all the necessary information about the policy holder.
Submit documents: You will also have to submit some documents, such as policy document, death certificate, bank account details etc.
Medical Examination: In some cases, the company may ask you to undergo a medical examination. This happens especially when the cause of death is suspicious.
Payment of Claim Amount: If your claim is found to be valid, the company will pay you the claim amount. This payment will be made to the bank account specified by you.
What to Do If the Claim is Rejected?
If the company rejects your claim, you should ask the reason for it. If you feel that the company's decision is wrong, you can talk to the company officials or take the help of a lawyer.
Remember Some Important Things:
- The process of making a claim can take time. So you should be patient.
- Submit all the documents on time. Late submission of documents can delay the claim process.
- If you are facing any problem, you can contact the customer service department of the company.
Riders of Life Insurance: Shield of Additional Protection
What are Riders?
Some Popular Riders:
Benefits of Riders:
What to Keep in Mind When Choosing Riders?
Finally:
Remember:
