I am based in Mumbai and am a full time Insurance advisor of Max New York Life .This site should give you new insight about life insurance and the right questions to ask when evaluating insurance proposals or existing policies. I welcome your thoughts and comments as well as the possibility of serving you.

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KETAN SHAH

What is Life Insurance?

Life insurance ensures that your family will receive financial support in your absence. Put simply, life insurance provides your family with a sum of money should something happen to you. It protects your family from financial crises.
In addition to serving as a protective cover, life insurance acts as a flexible money-saving scheme, which empowers you to accumulate wealth-to buy a new car, get your children married and even retire comfortably.
Life insurance also triples up as an ideal tax-saving scheme. To know more, read the Key Benefits of Life Insurance.
Key Benefits of Life InsuranceLife insurance, especially tailored to meet your financial needs
Need for Life Insurance
Today, there is no shortage of investment options for a person to choose from. Modern day investments include gold, property, fixed income instruments, mutual funds and of course, life insurance. Given the plethora of choices, it becomes imperative to make the right choice when investing your hard-earned money. Life insurance is a unique investment that helps you to meet your dual needs - saving for life's important goals, and protecting your assets.
Let us look at these unique benefits of life insurance in detail.

 

Asset Protection
From an investor's point of view, an investment can play two roles - asset appreciation or asset protection. While most financial instruments have the underlying benefit of asset appreciation, life insurance is unique in that it gives the customer the reassurance of asset protection, along with a strong element of asset appreciation.

 

The core benefit of life insurance is that the financial interests of one’s family remain protected from circumstances such as loss of income due to critical illness or death of the policyholder. Simultaneously, insurance products also have a strong inbuilt wealth creation proposition. The customer therefore benefits on two counts and life insurance occupies a unique space in the landscape of investment options available to a customer.

 

Goal based savings
Each of us has some goals in life for which we need to save. For a young, newly married couple, it could be buying a house. Once, they decide to start a family, the goal changes to planning for the education or marriage of their children. As one grows older, planning for one's retirement will begin to take precedence.

 

 

Clearly, as your life stage and therefore your financial goals change, the instrument in which you invest should offer corresponding benefits pertinent to the new life stage.
Life insurance is the only investment option that offers specific products tailor made for different life stages. It thus ensures that the benefits offered to the customer reflect the needs of the customer at that particular life stage, and hence ensures that the financial goals of that life stage are met.

 

Human Life ValueWhat is your Human Life Value?
Beyond all doubt, your life is invaluable. Yet, there is a certain worth that can be attributed to the financial support you offer your parents, spouse or children. This worth is referred to as Human Life Value (HLV). In the future, if your family does not have the protective blanket of your presence, they will no longer be able to enjoy the benefits of the income you earned. Put simply, Human Life Value is the present value of your future earnings.

 

Why should you calculate your Human Life Value?
You should calculate your Human Life Value so you can accordingly invest in insurance plans that provide your family with adequate finances and hence security even in your absence.
How do you determine your Human Life Value?
Your Human Life Value is determined by 3 factors:1. Your age2. Current and future expenses3. Current and future income
As a thumb rule, if you are 30 years of age, you should insure yourself for an amount approximately 8 times your annual income. At 35, your investment should be close to 6 times your income. Of course, the exact amount of your investment should be determined by the number of people who depend on you, you’re existing investments and your life stage. For example, if you are 30 years of age and have two children and parents to provide for, the amount you invest should be reflective of your requirements
Life insurance ensures that your family will receive financial support in your absence. Put simply, life insurance provides your family with a sum of money should something happen to you. It protects your family from financial crises.
In addition to serving as a protective cover, life insurance acts as a flexible money-saving scheme, which empowers you to accumulate wealth-to buy a new car, get your children married and even retire comfortably.

Do You Need Life Insurance?
The choices in life insurance policies are bewildering. Keep one thing in mind: if you don't need it, don't buy it. Life insurance needs vary depending on your personal situation. If you have no dependents, or if you don't generate a significant percentage of your family's income, you probably don't need life insurance, and the money you would have spent on it could best be invested or used elsewhere. If your salary is important to supporting your family, paying the mortgage, or sending your kids to college, life insurance is important to ensure that these financial obligations are covered in the event of your death. It's my personal opinion that life insurance should not be viewed as an investment. Its basic purpose is to ensure financial safety in the event of your death, so you should be sure to choose the right protection and if there IS an investment value, consider it an added benefit, not the primary reason for buying a particular policy.
Understanding and Choosing the Right Life Insurance
How to go about deciding and buying a Life Insurance Policy.
1.
Analyze why you need a life insurance policy. If you have a spouse and other dependents—kids and other family members—life insurance coverage is necessary as it can minimize the financial losses after your death.
2.
Assess your financial needs. Calculate the total financial value of your life and the loss that may accrue in case of an early demise. The key question is—how much financial compensation would be sufficient for the dependents in the event of your demise?
3.
Go online and search for companies that offer life insurance plans. Shortlist the companies that can provide the coverage you are looking for. If you do not have access to the Internet, find phone numbers of insurance companies and agents from your telephone directory.
4.
Contact insurance agents and collect information about different policies. One of the best plans is a Whole Life policy. It offers you wide coverage with a fixed premium and an option to get dividends. Remember, the names of such policies may differ from one company to another. These can be Whole Life, Custom Whole Life and Modified Premium Whole Life. However, the coverage and terms offered by different companies are similar.

5

Calculate the face amount for which you want to buy life insurance. You can do this by an easier method. Make a total of your annual income. Multiply that amount by minimum six times. This can be a face amount of your policy. Alternately, estimate the total amount you will earn in the next five to six years, as everyone in the family would have more matured by that time. This can be the face amount. You may also evaluate your premium affordability and select the face amount of insurance policy.
6 Get multiple quotes. All companies have different coverage clauses and the premium depends on it. Talk to the agents about the kind of coverage you want and seek his advice. Consider the best option in terms of both premium and duration.
7
Ensure that you do not miss any important kind of coverage. Get all doubts clarified before finalizing the policy.
8
Ask your agent to inform you promptly about any new coverage that the company offers in the future.
9
Consider insurance as an investment for your family. Choose the best option that can help your family to tide over the great loss in the event of your death at least financially.