You must consider life insurance as one of the most important pillar of intelligent financial planning in your life especially when you have a family and dependants. Life insurance is an important form of cover for anyone, regardless of the income he/she is earning. Whether you have a family or your own home, a life insurance policy will provide complete peace of mind from a financial perspective. Mawazna.com provides life insurance comparison service enabling you to compare various life insurance plans offered by leading life insurance providers in Pakistan so that it can save your valuable time and money. However, it is not a simple case of selecting any kind of level of cover because it is vital that you research the cover that is available to you and make sure that the sum assured that is offered will work for your situation.
There are many features that come with life insurance plans but your focus at this moment in time should be on how to select the best plan from the many life insurance plans being offered by leading life insurance companies made available for you.
Prior to Choosing a Policy, Calculate the Sum to be Assured
Prior to going ahead and selecting a policy, it is vital that you work out the sum assured that you require. This is easy to work out by identifying what you spend on a daily basis, any debts you might have and all other expenses that you will have to pay such as education for your children or supporting wedding of your daughters or to have a cover that provides your a shelter against medical emergency expenses. You should also establish the total sum your family will need in case of your death (God Forbid) to support the general day to day or one-off expenses related to lifestyle of your loved ones.
You will also need to establish whether you require a specific term to be covered for your life insurance product (i.e. term-life insurance) such as 10 years, 15 years, 20 years etc. Or if you need a life insurance plan that will last until your death, a whole life insurance plan.
The Factors You Need to Consider
1- Your expenses
The whole idea behind choosing one of the many life insurance plans is to ensure that your family is protected from the costs associated with your lifestyle. Regardless of your income, you will need to include your monthly expenses and then multiply that by 12 to work out the annual cost. Therefore, you will need to consider the cost of utility bills, grocery costs, all family premiums paid out and any other expenses.
2- Multiply Income
Multiplying your income is another method of working out how much insurance cover you need from the life insurance plans available to you. This method requires you to multiply your (you and your spouse if both of you are earning) income by the age group that you fall in. Therefore, you will be able to work out the minimum and maximum sum assured that you would need in line with your age group and income. As part of this process, you will also need to deduct your expenditure from the net income and then multiply it. If you choose to use this method to determine which life insurance plans are right for you, you will need to bear in mind that you should review the calculation every five years. This will enable you to determine whether additional policies will be required to continue to support your family.
3- Assets and Liabilities You Have
One of the biggest commitments we make is one of purchasing a house and so, many people have no other option other than to take out a home loan in order to cover the cost of the purchase. When the time comes for you to choose one of the life insurance plans available to you, you will need to add all loans and debts to the list of liabilities. This will include home loans, debts such as car purchases and any assets you might own such as gold or investments you have made in the capital market. Through the calculation of all assets and liabilities, it will make it possible to clearly identify just how much is required for the sum assured.
Life Insurance is Vital
Life insurance is crucial to you and your family, so you need to make sure you take out the policy as soon as you can. However, you will need to determine just how much cover you require and so, the above points should make it possible for you to determine your requirements and the sum assured that you should select. Through all of this, it is vital that you remember to compare all life insurance plans online at Mawazna.com to ensure that you get the right cover for you.
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