Buying a life insurance policy is a smart move which ensures financial coverage for your family and loved ones. Well, it is a common question we ask before buying a life insurance policy that how much life insurance do we actually need. There may be various needs and answer to this depends on many factors but a good rule of thumb is getting life insurance coverage that's 10-12 times your income. However, as said before it may depend on your individual financial circumstances.
If you have a young family, then term insurance is often the best choice. And, it makes sense to it makes sense to buy coverage that is worth at least 10 times your gross annual income. The term insurance policy allows you to purchase the most coverage at the lowest initial premium.
Since financial circumstances and goals differ per individual, the most important step is while buying a life insurance policy is to determine how much coverage you need. Because as per your current income you would like to match the amount your nominees are going to get in case of a mishappening so that they continue to live the same kind of lifestyle they are used to as of now.
Other factors that you should look at while determining the amount of coverage you need are how much money your loved ones would need in order to meet their immediate, ongoing, and future financial obligations if you were to suddenly pass. Once you have done these calculations, you must then look at the resources (like spouse's income, accumulated savings, life insurance you may already own, etc.) your family members might draw from in order to support themselves. The difference between these two sums should be the minimum amount of life insurance you require.
We have discussed a very simple way of determining your life coverage. However, there may be certain factors like the effects of inflation and also predicting the earnings of your investments over the long run can be a tricky matter. Your life insurance advisor can discuss and understand your needs and help in determining the right coverage needed to protect the ones you love. If you need a personalized recommendations, then you may call us at 9818510748 and an expert life insurance will help you.
We are sharing this video from a stalwart of world insurance industry to understand why you need life insurance!
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