Life Insurance for your home maker

Your spouse is a home-maker. Do you think that she justifies a life insurance cover? Read on to know the answer…

Many consider the premium payable on a life insurance policy as a necessary expense with no real short-term benefits. Apart from saving taxes, you may reason that a life insurance policy is needed only for the family’s breadwinner. Hence, taking a policy in the name of your spouse who is a home-maker is an avoidable expenditure.

However, we beg to differ. Indicated below are key points that may make you more than willing to gift a policy to your home-maker spouse…

Þ               Uncertainties of life, be it accidents, health problems or natural calamities can strike anyone (a breadwinner or a home-maker) at unexpected times. There is no other better antidote against uncertainties than an insurance policy.

Þ                   If you are the sole bread-earner of the family, your limited income may not be sufficient to take care of the health or accidental emergencies of your spouse.  An insurance policy in the name of your spouse would come handy in saving your hard-earned money from the onslaught of rising health and medical bills.

Þ                   Many insurance companies give a discount on the premium amount if you and your spouse or your entire family is covered in a single policy. Thus, the sum assured will increase substantially for a nominal additional premium.

Þ                   Buying a policy in the name of your spouse demonstrates your responsibility and care. Regular premium payment not only inculcates financial discipline but also serves the financial purpose of your spouse (and also children) for his/her entire life term.

Þ                   Many insurance policies come with the option of riders (or additional benefits) that can be added to the main policy by paying only a nominal additional premium. Thus you can save costs by not having to buy separate policies for health, etc.

Þ                   A home-maker spouse may not have regular income but definitely has an economic value in terms of the domestic services provided by him/her. The receipts of insurance proceeds of your spouse in case of accidents or untimely death would ward off the expenses that may arise when someone else takes up up his/her duties.

Insurance policy is a long term commitment. Hence, before buying one, consider all aspects such as the purpose, the term of the policy, age of your spouse and yourself and the disposable income before zeroing on one.

Online Investments and its flaws

Erratic investment pattern

Rather than undertaking ad-hoc investments, make the act of investing a part of your routine. By doing so, you follow the ‘savings first’ approach towards your finances. Regular investments over a long period of time, makes your money grow exponentially.

Concentration of investments

Do not concentrate your investments plans in a particular asset class, industry, company, etc. In case the underlying asset class/industry/company does not perform as expected, the capital erosion would be severe.

Mismatch in investments and goals 

The investment you choose must match your financial goal(s).  For instance, in case of a short-term goal, a debt oriented investment would be preferable vis-à-vis an equity oriented investment.

Inadequate insurance cover

While it is essential to have insurance, you also need to reassess your insurance needs regularly. An insufficient insurance cover Enhance or prune the insurance cover to ensure that you are optimally insured at all times.

Not making nominations and a will

You should assign nominees to all your investments. It is also desirable to make a legal will. This would safeguard the rights and interest of your heirs and prevent them from getting embroiled in complex legal proceedings for establishing their rights on your financial assets.

Not maintaining proper records

To ensure smooth transactions for your investments, maintain all records. Have copies of accounts statements, pass book copies, etc. Not only will you have a bird’s eye view of your portfolio, these would also serve as a reference for portfolio rebalancing. The records need to be maintained and updated. You should also make such records available to your nominees and legal heirs.

Avail discount on higher sum assured on Term Insurance

Avail discount on higher sum assured

If funds permit, getting yourself insured for a higher sum assured has twin benefits – you get a higher coverage and discounts on the premium payable. Most insurance companies offer discounts on higher sum assured.

Buy low cost polices

A term life insurance plan is one of the cheapest and simplest plan which offers life cover at minimum premium. You can also reduce the cost of insurance by selectively choosing riders that you need and avoiding the ones that do not suit your requirements. 

Buy bundled insurance

Based on your requirements, you can secure better deals by bundling insurance policies. This is because selling two or more insurance policies to the same customer reduces the marketing costs for the insurer. For example, by opting for a family floater in a health insurance plan, you can get coverage for your family members at a cheaper rate compared to buying individual health insurance policies for each family member. 

By employing any or a combination of the above-mentioned techniques, you can make insurance more affordable and rewarding!

Life Insurance best choice for your Infant child

The ideal way to secure your infant’s future would be to insure your own life with him as the beneficiary of the policy. That is, if something were to happen to you, the life insurance proceeds would fund his future education and all the other plans that you made for him. It is the loss of your income that is being insured in this case, and rightly so.

There are numerous children’s plans available in the market with varying benefits and different investment options. Undertake careful research and select the right product that meets your desired future cash flow requirements and patterns, your risk profile, premium payment options and policy term.

But there is one feature of such policies that you just cannot and should not ignore - the premium waiver benefit. This is to ensure that if premium payment stops due to your death or disablement, future premiums on the policy would be waived off (paid by the company). This would ensure that funding for your child’s future is not interrupted or compromised even in the face of the most extreme adversity. Such a benefit could be in-built in some policies but certain other policies would offer it as a rider to be added on to the main policy. It is pertinent to ensure that this benefit is available any which way.

life insurance cover and Its importance

Securing an earnings increment

An earnings increment will lead to the availability of greater luxuries for your family, which may tomorrow become a necessity. In such a scenario, an enhanced insurance cover will ensure that your family will not have to give up on these luxuries which have become a part of their standard of living in case of an untimely demise.

Parents retiring

Once your parents retire, they may need your financial support. It is simple mathematics – additional dependents equates to a need for an additional life cover…

Availing debt

In case you have availed a home loan or any other debt, how will your family be able to repay it upon your unfortunate demise? Would the repayment burden lead to the selling of assets, depletion of savings, lower standard of living, etc? In order to provide financial comfort to your dependents, it is essential for you to enhance your life insurance cover to include all your outstanding debts.

Nearing retirement

Though you have been planning for your retirement since a few years, it is not necessary that the sum would help to financially secure your golden years. Take aid of insurance to ensure that you are able to fulfil all your unrealised dreams during your retirement.