Step by Step Planning for Life Insurance

The first thing that you got to do one you receive your first pay check is to plan for your life insurance. This is something that will yield you in the long run and will not leave your loved ones in danger in case of any mishap. Life insurance is not like term insurance when the family members get money only in case of death. You can enjoy the long term benefit. However, in such a case, it is essential to have proper planning for the investment.

Consider this as an investment:

Consider life insurance to be insurance with future return. The mental set up is very much necessary for a life insurance and you shall be ready to invest so much money for so long duration of time. It is very important that you start investing early because that would reduce the premium. People who invest in their 20s pay quite less premium compared to one who invests in 30s and 40s. It is thus important to make your mind about life insurance and treat it as an investment and not something that is mandatory.

Decide the amount of life insurance:

It is important to understand how much cover is required for your family. While any amount is not enough to cover up the loss, think practical. Life insurance unlike term insurance is something that the customer can enjoy. So, plan accordingly. Ideally, the sum assured shall be 5 to 8 times of the yearly income but it will depend on the amount that you can bear and the tenure of the insurance.

Life insurance lasting for 15 to 20 years can be taken. Check the amount of money that you are investing in the insurance and use a premium calculator. If you have to save a bit too hard, go for it, because it is worth investing. Every company has a premium calculator tool which will guide you to the right premium amount. You have to take in account the other perspectives of your life and other expenditure while calculating the premium.

Check the plan details:

Once you have decided you are going to invest in life insurance, you can check out plans online. Make a comparative study of different policies offered by the companies.  Check the exclusions of the plan and the sum assured. You can also keep into account the trust-ability of the company. There are several such big companies in India that offer insurance with good coverage. Check the details of the plans from the company executive and choose the one as per your requirement.

Make plan for savings:

If you want to invest Rs. 30,000 per year, make sure you have money to make the investment. Plan for it for some time, in order to accumulate the money at the right point of time. Make the same sort of effort every year so that you can have that amount of money without a sudden need arising. This is the major problem with investment. We generally don’t plan and suddenly we have a backlog to tackle. Don’t let that happen to you.

While investing, please keep in mind that life insurance and term insurance are two different concepts. You can invest in any of them considering your set of mind. There is nothing to assume that you are planning finances after your death when you are investing in such plans. It is just that you want your investments to be safe and at the same time keep the interest of your family in case of any mishap. Plan ahead and invest in the right way to make your money grow.