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on Importance of #LifeInsurance in #FinancialPlanning & How much Minimum Insurance Cover One Requires 
Must read for everyone, especially youngsters ....
(If you like then please re-tweet to maximize reach)
on Importance of #LifeInsurance in #FinancialPlanning & How much Minimum Insurance Cover One Requires Must read for everyone, especially youngsters ....
(If you like then please re-tweet to maximize reach)
#LifeInsurance is defined as a contract between an #insurance policy holder and an insurance company, where the insurer promises to pay a sum of money in exchange for a premium, upon the death of an insured person or after a set period.
Before investing any #money, one should first take adequate coverage of #LifeInsurance.I shall explain this with help of a few examples ahead.
Consider example of an Indian family comprising of Mr. Ram (head of family), his wife, his kids & parents. Only Mr. Ram earns and pays for all expenses of his family. Now if Mr. Ram dies because of any event, then who will take care of his family members
#LifeInsurance
If Ram's family doesn't have enough money, either someone from family has to immediately take up a job & start working which may not be possible for them, or they have to decrease their standard of living to maintain expenses, or take loans to meet their short term needs.
Solution - One must have backup plan which can gives the family same kind of income when the main earner is no more. Mr. Ram must have adequate #LifeInsurance so that even if he dies his family would not face any financial problems in future.
Important Tip 
If there are some debts like Home Loan, or any other tasks which need money apart from regular income, life insurance cover must be good enough to cover that too.#InvestmentPlanning #FinancialPlanning
Another Example - Mr. Shyam has a family expense of ₹ 25,000/- per month and there is a #HomeLoan of ₹ 25 lakhs to be paid within 10 years. He is 27 years old and has a wife, 2 kids and parents to look after. All of them are financially dependent on him.
Now in this case, if he dies, then who will take care of the Home loan? Who will provide them enough money to live life comfortably, etc? They need ₹ 25,000/- per month (₹ 3 lakhs per year) which they can get as an interest if they have ₹ 45 to 50 lakhs in bank.
Add home loan of ₹ 25 lakhs to this which means that this family must be covered with minimum ₹ 70 lakhs. Now considering inflation effect, Mr. Shyam needs a minimum #LifeInsurance cover of ₹ 85 to 95 Lakhs.
Remember As an earning member of the family your first and most important responsibility is to give adequate cover to your family. You must understand that this is not an investment for monitory benefit later in your life, but it’s for your family happiness and future.
Amount of #LifeInsurance Cover depends on -The extent of dependency of your family from your income, i.e. higher the dependency, higher should be your insurance cover.
You must have sufficient amount of money to cover your liabilities.
#InvestmentPlanning
Soon will make a thread on types of life insurance plans available in India.
Feedback / Suggestions and constructive comments welcome.
Feedback / Suggestions and constructive comments welcome.
