Many people who are not well acquainted with insurance most often ask questions like what is the requirement of an insurance policy and why should i have one. If you have the same question then this article will help you to get an answer.
Insurance can be taken as an investment or a risk coverage option. It depends on the insurance policy holder’s requirements and necessity. It’s not required that everyone needs to have an insurance policy. You may not require an insurance policy if your income is not a major necessity to your family members.
Insurance policy is a must if you are satisfying one the following situations;
- You have dependents and you want to protect them from risk or you want an investment for a particular goal like your children’s education or marriage.
- You do no have enough assets to take care of your family after your death.
- Your Family member does not earn anything.
- You are working and your salary is important to support your family.
If you have any of these situations then you must have an insurance policy to cover up these risks. To select the right insurance policy, one must consider the need and offers of insurance companies.
We have listed 3 basic questions to help you prepare yourself in deciding certain factors while going for an insurance policy;
How much a Insurance policy will cost
There are hidden cost such as fees and commission that you may not be aware unless you buy the insurance policy. Before buying any insurance policy you should be aware about that.
What type of insurance policy do I Need
Decide the insurance policy based on your requirement. If you want to cover your risk then go for a term plan or else an endowment plan for investment purpose.
What is my life insurance requirement
Requirement of life insurance depends on factors like inflation, your source of income, dependents you have, your debt/liability and the lifestyle you enjoy. Generally it’s suggested to have a plan which covers 8 to 10 time of your annual income.