Hemant Desai: My annual income is ` 10 lakh and I have purchased a term plan worth ` 25 lakh. Now I am planning to marry and also buy a house this year. Should I increase my insurance cover?
Anilkumar Singh, Chief Actuarial Officer at Aditya Birla Sun Life Insurance, replies:
It is prudent of you to evaluate your insurance policy at every stage of life and make sure that you are adequately covered. Both marriage and home buying are significant milestones and come with certain liabilities. Therefore, you should opt for additional cover given that your need for insurance is about to increase. The rule of thumb is to get a term cover which is 8-10 times your annual salary so that the insurance amount is enough to take care of your income for the next 15- 20 years or until your family finds an alternative source of income. Hence, it will be wise to increase your cover by opting for an additional term plan that will provide the remaining sum assured.