Since you are a financially savvy person with an open mind and you have already chosen a life insurance plan for yourself, it is now time to evaluate the need to upgrade. In this fast moving dynamic world where things change within seconds, are you ready to take on life’s most important decisions and responsibilities especially in your absence with a Life Insurance Plan? So, be it retirement, kid’s education or any other financial responsibilities that you may have, you need to plan well ahead in time.
Evaluate
It is also very important to evaluate the requirements according to the need of your family. Even Maslow’s “Hierarchy of Needs” highlights the second most important need after Physiological Need are Safety Needs. Safety needs cover Personal Security as well as Financial Security. Personal Security would include health and well-being and safety against accidents and illness as well.
The essence of Life Insurance:
Let us understand what the real essence of Life insurance is all about-
Life Insurance is an agreement between the insurance company and the policyholder wherein the insurer guarantees to pay assured amount to the insured at the end of specified time period or at the time of the demise of the insured whichever is sooner. The insured pays a predefined sum of money in the form of premium either at regular intervals or in a lump sum. This is the technical definition.
However, Life insurance really is your Plan B. It is the secure and safe way to protect your family against financial contingencies. Not only does it protect you and your family members but it also provides you with Tax benefits as the premium paid towards Life insurance gets tax exemption under Section 80C.
You must be wondering how much coverage is required. This depends on various factors like marital status, age, dependents, family history, etc. Moreover, your life insurance coverage must be reviewed from time to time as your priorities change according to time.
The expert talk:
The leading insurance company Birla Sun Life Insurance Company Limited talks about the need to upgrade your Life Insurance Plan. Each one of us wants to have sufficient wealth and secured future. However, how many of you have actually planned it ahead of time? By planning, I mean, penning it down. As long as your Financial Goals are not pinned down, they are simply dreams and wishes and not goals. For fulfillment, they need to first become goals and then planned well in advance so that they are fulfilled under all circumstances.
Time to Upgrade:
Birla Sun Life Insurance Company Limited explains why you need to upgrade your Life Insurance Policy. In India, Life Insurance is often sold and not bought. Hence, more often than not, life insurance is a by-product of tax saving needs and sudden push sales by an agent or a favor to a bank manager in lieu of some service. However, it is now that you need to realize that Life Insurance portfolio can make a huge difference to your Financial Goals and cam actually help you achieve them.
Step 1: Pen down your Financial Goals in a SMART way, i.e. Specific, Measurable, Achievable, Realistic and Time Bound.
Step 2: Once your goals are penned down with the SMART parameters, it is very easy to map each and every goal to a specific product.
Step 3: Evaluate whether your current plans or products are in sync with your financial goals and they meet all your needs.
Step 4: If not, it’s time to act now. Upgrade your Life Coverage so that your Plan B is in place.
Step 5: Once you evaluate and upgrade, stick to your plans and remain invested.
And finally don’t forget to review your portfolio next year to check if the plan is as per your need or your need to further upgrade according to your changing lifestyle, needs and wants. Change is the only thing that is constant in your life and so will your financial portfolio need evaluation. It is not a destination but a journey. So, keep an eye on your portfolio with the other one on your life coverage, which would come handy in case something unfortunate were to happen to you.
