INSURANCE PLANNING

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Insurance is an important element of any sound financial plan. Different kinds of insurance help protect you and your loved ones in different ways against the cost of accidents, illness, disability, and no more.

Life Insurance: Your Needs Dictate the Kind And Level Of Protection

Life insurance, payable when you die, can provide a surviving spouse, children, and other dependents the funds necessary to help maintain their standards of living, can help repay debt, and can help fund education tuition costs. The amount you need depends on your situation. If you make Rs.1,00,000.00 a year, have a sizable mortgage, and two kids headed to a good (read: expensive) college, you could need as much as Rs.10,00,000.00 in coverage.

Value-accumulating whole life or universal insurance is often offered as death benefit protection with a cash value component that you can borrow against or eventually cash in by surrendering the policy. Term insurance costs less, but may remain in effect only for a specified term of years. For many families, a combination of whole life and term insurance may provide for current and future needs.

Your financial professional can help you assess your needs to determine the kinds and amounts of life insurance that are right for you and your family.

Health Insurance: Available Through Your Employer Or Privately

Most people enjoy medical insurance as an employee benefit, often with their employers paying all or part of the premiums. Many employers offer a choice between HMOs (health maintenance organizations) and traditional fee-for-service care. Rates for HMOs are usually cheaper but have more constraints. Privately purchased health insurance is much more expensive – often by several hundred dollars a month – depending on such things as deductibles, coverage choices, and location.

Points To Remember

  1. Your insurance needs will vary based on your family, age, and economic situation.
  2. Anyone who owns a car should have auto liability insurance. Collision, fire, and theft can protect your investment in a valuable car.
  3. Homeowner’s insurance should generally provide coverage up to 80% of the cost of replacing your home, minus land and foundation. Homeowners should also have liability coverage, and those with considerable assets may want to purchase liability up to Rs.10,00,000.00.
  4. Life insurance can be an especially important financial tool that has many uses, the most important of which is protecting your family.
  5. Long-term care insurance may be a necessity for older people, because the long-term coverage of Medicaid and Medicare is often inadequate.

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