Skip to main content

Consider your Loans while Buying Life Insurance

Top SIP Funds Online 

Before purchasing a policy, you should calculate your total liabilities such as EMI for a home loan and other borrowings.

While purchasing an insurance policy, many of us look for one that has lower premium pay out without giving much attention to the extent of protection needed for the family. An insurance buyer should look at the cover as protection and not mainly as an investment. Thus, the cover you buy is not for you but for protecting the family if something unfortunate happens.

Before purchasing a policy, you should calculate your total liabilities such as EMI for a home loan and other borrowings, children education cost and other expenses required to meet the family's needs. Once you evaluate the need, you should buy the best suitable plan having the desired sum assumed to protect your family. However, if you do not have too much of liability, then you need to pay a lesser amount to protect your family financially.

Therefore, the premium payment would also depend on the extend of liabilities to be covered and not just your age.

Term insurance is ideal for financial protection of a family.  As a thumb rule, the sum assured in a term plan should be 10-15 times of your annual income. If you have any liability, say a home loan then you must take into account this liability, and determine a cover which can take care of other expenses, such as children's education, etc, in case of your death during the term period. So, it's clear that if you have liabilities, you will have to go for a bigger sum assured and accordingly your premium will also go up.  Let's take two examples to further elaborate this:

=> Mr A ( 35 Years Old)  is earning Rs. 5 lakhs per annum and has no liability. His family includes him, his wife and two kids. He can easily look at buying Rs. 50 lakhs term cover to safeguard his family from any financial emergency in his absence. The annual premium for Rs. 50 lakhs cover will be between Rs 6000-9000.

=> On the other hand, Mr B ( 35 Years Old) is also earning Rs. 5 lakhs per annum and has a home loan of Rs. 25 lakhs. His family also includes him, his wife and two kids. In this scenario, Mr B would have to take his loan amount into consideration and must buy at least Rs. 75 lakhs cover, so that burden of home loan does not pass on to his family and they can easily manage their household expenses. The premium for Rs. 75 lakhs cover will cost between Rs. 8000-12000, depending on the policy customer chooses.

Hence, it shows that if you reduce your liabilities or set – off the unnecessary debt amount, you will need a lesser cover to protect your family and also need to pay a lesser amount of premium which eventually, will reduce your overall liabilities during working life.                




SIPs are when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich

For further information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com 

Popular posts from this blog

National Savings Certificate

National Savings Certificate Here's everything you need to know about the 5-year savings scheme offered by the Government This is a 5-year small savings scheme of the government. From 1 July 2016, a National Savings Certificate (NSC) can be held in the electronic mode too. Physical pre-printed NSC certificates have been discontinued and replaced with Public Provident Fund-like passbooks. What's on offer The minimum amount you can invest in them is Rs100 and there is no upper limit. Under this scheme, all deposits up to Rs1.5 lakh qualify for deduction under section 80C of the Income-tax Act, 1961. The interest earned is taxable. You can invest in multiples of Rs 100. These certificates can be owned individually, jointly and also on behalf of minors. The interest rates for all small savings schemes are released on a quarterly basis. The effective rate for NSC from 1 October to 31 December is 8%. The interest is calculated on an annual compounding basis and is given along w...

Am you Required to E-file Tax Return?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...

Mutual Fund Review: HDFC Index Sensex Plus

  In terms of size, HDFC Index Sensex Plus may be one of the smallest offerings from the HDFC stable. But that has not dampened its show, which has beaten the Sensex by a mile in overall returns   HDFC Index Sensex Plus is a passively managed diversified equity scheme with Sensex as its benchmark index. The fund also invests a small proportion of its equity portfolio in non-Sensex scrips. The scheme cannot boast of an impressive size and is one of the smallest in the HDFC basket with assets under management (AUM) of less than 60 crore. PERFORMANCE: Being passively managed and portfolio aligned to that of the benchmark, the performance of the index fund is expected to follow that of the benchmark and in this respect, it has not disappointed investors. Since its launch in July 2002, the fund has outperformed Sensex in overall returns by good margins.    While every 1,000 invested in HDFC Index Sensex Plus in July 2002 is worth 6,130 now, a similar amount invested in Sensex then wo...

Different types of Mutual Funds

You may not be comfortable investing in the stock market. It might not seem like your cup of tea. But you can start by investing in Mutual Funds. Many first-time investors invest in Mutual Funds. This is because they do not know how to invest in individual securities. Basic information on Mutual Funds People invest their money in stocks, bonds, and other securities through Mutual Funds. Each Fund has different schemes with specific objectives. Professional Fund Managers look after these schemes. Your Fund Manager could help you invest in a scheme that suits your financial goal. Functioning of Mutual Funds You could make money through Mutual Funds in different ways. A single Mutual Fund could hold many different stocks, bonds, and debentures. This minimizes the risk by spreading out your investment. You could earn dividends from stocks and interest from bonds. You could also earn capital by selling securities when their price increases. Usually, you could choose to sell your share any t...

IDFC - Long term infrastructure bonds - Tranche 2

IDFC - Long term infrastructure bonds What are infrastructure bonds? In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (" Income Tax Act ") to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Long term infrastructure Bonds by IDFC IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-te...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now