Insurance
In simple words "Insurance is a promise
of reimbursement in the case of loss; paid to people or companies
so concerned about hazards that they have made pre-payments to
an insurance company"
Life is unpredictable. But in face of adversity, our responsibilities
towards our parents, children and loved ones need not be compromised.
Insurance planning equips you to smooth out the uncertainties
and adversities that life might send your way, so that the best
that life has to offer, secure in the knowledge that your beloved
ones are well provided for. For more details in various aspects
of Insurance see below .
What is the
importance of Insurance?
Insurance is not for the person who passes away, it for those
who survive. It is extremely important that every person cover
his risks so that his life, or in case of any eventuality, his
family is lifestyle does not undergo any drastic change. It
is the responsibility of every bread earner to guard against
the events that could affect the family in the unfortunate circumstance
of his demise. Thus, the need for proper insurance.
What are your
insurance needs ?
As an individual, for the extent of financial protection you
need is different from that as a married man which in turn is
different from that as a parent. At each lifestage, it is necessary
to re-evaluate the amount of protection and provision you require
and adjust for the same. Some of the events in your life for
which we should re-evaluate and plan your life insurance needs
time to time :
- Marriage
- Birth of a child
- Schooling of child
- College education of child
- Marriage of child
- Retirement
Besides above basis events there are several responsibilities
generates our insurance needs like property, casualty, health/medical
problems.
What is life
Insurance?
Life Insurance is a contract providing for payment of a sum
of money to the person assured or, following him to the person
entitled to receive the same, on the happening of a certain
event.
What are the
advantages of life insurance?
Insurance ensures your peace of mind by covering various types
of risks like death,mediclaim accident etc.in addition it is
money mutiplying investment saving plan it is superior to an
ordinary savings plan: This is so because unlike other savings
plans, it affords full protection against risk of death. The
full sum assured is made available under a life insurance policy,
whereas under others savings schemes the total accumulated savings
alone will be available.
How much insurance
do I need?
The main purpose of life insurance is to provide a financial
cushion to your loved ones in the event that something unfortunate
should happen to you. One must provide enough, so as to generate
a future income stream that will take care of the financial
needs of their dependants. How much insurance you need depends
on your annual income, your expenses and your existing assets.
Do we really
need insurance?
Many financial experts consider life insurance
to be the cornerstone of sound financial planning. It is generally
a cost-effective way to provide for your loved ones after you
are gone. It can be an important tool in the following ways:
Income replacement : For most people, their key economic
asset is their ability to earn a living. If you have dependents,
then you need to consider what would happen to them if they no
longer have your income to rely on. Proceeds from a life insurance
policy can help supplement retirement income. This can be especially
useful if the benefits of your surviving spouse or domestic partner
will be reduced after your death.
Pay outstanding debts and long-term obligations
: Consider life insurance so that your loved ones have
the money to offset burial costs, credit card debts and medical
expenses not covered by health insurance. In addition, life insurance
can be used to pay off the mortgage, supplement retirement savings
and help pay college tuition.
Estate planning
The proceeds of a life insurance policy can be structured to pay
estate taxes so that your heirs will not have to liquidate other
assets.
Charitable contributions : If you have a favorite charity,
you can designate some of the proceeds from your life insurance
to go to this organization.
What if I already
have life insurance coverage?
Even if you have life insurance, keep in
mind that life changes and, as it changes, so do your needs
for protection. Your life insurance needs should be reviewed
every few years. Any of the changes listed below should prompt
you to sit down with your insurance agent to make sure your
plan is still appropriate.
- You have recently married or divorced
- A child or grandchild has been born or adopted
- Your health or your spouse's health has deteriorated
- You have begun to provide care or financial
help to a parent
- A loved one will require assistance or long
term care
- You have recently purchased a new home
- Your children or grandchildren are about
to enter school or college
- You or your spouse retired or will retire
early
- You or your spouse has been promoted recently
- You have refinanced your home mortgage in
the past six months
- You or your spouse has received an inheritance
