Death is inevitable. Almost everyone wants a peaceful death and there are many who pray for a sudden death. If you are one of them, death might be a release from suffering for you, but what about your family if you have not planned your finances properly? What if your life cover is insufficient? As a breadwinner of your family, you need to understand how you should plan for and secure their future before praying for a sudden or peaceful death.
Simply buying an insurance plan is not enough for securing the financial future of your family. Rather, you need to analyze your current obligations and needs, as well as future goals, to purchase a life insurance with the right amount of coverage. It is quite common for individuals to opt for any insurance which might not even fit their requirements in the hurry to just have some insurance coverage. The best way to analyze your financial requirements and goals is to spend some time with your financial adviser, who will then be able to recommend a suitable life coverage policy.
Evaluation of your assets and financial obligations is necessary to understand the right amount of life coverage you need by your loved ones. The first step of the evaluation process is to take note of the debts you have. Your financial coverage from the insurance must be more than the amount of debt you have in your books. For example, if you have taken a mortgage loan for $1,000,000 and a car loan for $500,000, then your insurance sum assured must be above the total value of the loans, i.e. $1,500,000. The coverage will have to be more as the interest is not included in this value yet. If some unfortunate event does happen to you, then your family will be able to pay off these debts easily.
The second step is an analysis of your income and expenses. The primary purpose of buying life insurance coverage is to help your family carry on with their lives without worrying about the financial burden. A statement of your income and expenditure can be drawn up so that you have a good idea of how much you get from different income sources and how much your family needs annually. This estimate has to be multiplied by the number of years for which you believe your family would need. If your children are young, you would need to buy insurance with higher life coverage as your kids will need to finish their education before they start working.
The next part is to analyze your financial goals, such as your children’s higher education or a second property. These financial aspirations do not need to be given up when you die if you plan your finances properly.
Finally, add up the sums from the above and you can derive the value of your required sum assured. You can then look for the most suitable policies to meet your needs.
http://teamconcurs.com.sg/wp-content/uploads/2017/04/logo-300x109.png00teamconhttp://teamconcurs.com.sg/wp-content/uploads/2017/04/logo-300x109.pngteamcon2018-01-13 07:32:062018-01-10 07:33:28How to Determine the Ideal Life Coverage