Life In­sur­ance

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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.

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