Exposed - 5 Reasons Why Your Investment Plan Can Fail

The best way to ensure your family is taken care of after you is to buy a term insurance. Its the most suitable way of guarding your family from financial hardships.Its important to have the knowledge of how to insure and how much to insure for.

Below is a way to decide your insurance needs:

1. Time left for retirement-

   Time remaining to retire here does not necessarily mean retirement from your job, it means the time period till your family members will depend on you for their financial needs. Once you know the number of years for which you have to stand as the financial support, look out for policies that offer the matching policy term and maturity age.If you are going to retire after 30 years, take a term insurance policy for 30 years.

2. Loans and Debts-

   As far as possible, take debtors' insurance so that your debts can be paid off straightaway. If you have a housing loan, the lender has probably made sure that you already have such insurance for that loan. Other loans need to be considered. While you can add these to your main term insurance, taking a policy where the insurance company will directly pay off lenders has the advantage that your survivors will not be tempted to carry the loans. Do not waste money in insuring unsecured personal debt like that for credit card. The card issuer cannot make your family pay so there's no need to cover that, unlike say, vehicle loans where you wouldn't want the family car to be possessed by the lender.

3. Future Expenses-

4. Education-

   Invest in a policy that is conceptually term insurance, that is, which does not have any payout if your children get educated during your lifetime.

5. Living expenses-

   Estimate what living expenses are going to be an estimate the investment needed to yield that much return. Your term insurance should be for this amount.Sum assured should be purely based on current lifestyle, annual family income, annual expenses, current investments (if any) and liabilities like home loan or education loan overhead. The final value after considering these figures will be the Life value of prospective insured. Most insurance companies provide a 'Human Life Value' calculator on their website to ease the task of calculations.

HDFC Life offers its patrons the best investment plans in the Industry. Choose a term insurance best suited for you and help secure your familys financial future.

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