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

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...

WEALTH TAX

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 WEALTH TAX   WHAT CONSTITUTES WEALTH? For wealth tax purposes, "wealth" means property , urban land, car, jewellery , yacht, boat, aircraft and cash in hand in excess of Rs 50,000. CAUTION POINT | Do not think you will have an easy escape from wealth tax by transferring your `wealth' without consideration to your spouse or minor child. Such assets will also be considered as your wealth. HOW TO DETERMINE YOUR TAXABLE WEALTH Add the taxable value of the above assets (computed as per the detailed rules for valuation) owned by you as on March 31 (for FY 2014-15, it will be March 31, 2015). In case you sold your car during the year, it will not be taxable wealth. Deduct loans if any obtained by you to acquire any of the taxable assets from the value of gross tax out for at least 300 days in a...

Equity Savings Fund

Invest Equity Savings Fund Online   The best part about these funds is that they are subject to equity fund taxation and at the same time are structured like MIP like funds . This new category, equity savings funds , offer a little of everything. They allocate money to equities & equity related instruments, and fixed income. They aim to generate returns by diversification. Such funds invest in fixed income and arbitrage to protect the investors from short term volatility and equity for capital gains. The best part of these funds is that they are subject to equity fund taxation and at the same time are structured like MIP funds.   MIP funds however are subject to debt fund taxation. Investors Equity savings funds are suitable for the following: First time investors who seek partial exposure to equity with less volatility and greater stability Investors seeking moderate capital appreciation with relatively lower risk Those wh...

How to Pick Top Performing Mutual Fund Schemes

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   How to Pick Performing Schemes  Funds that continue to stay in the top grade of performance over longer periods are the ones to bet on, advise investment experts   The mutual fund performance charts of the past few months make for an impressive reading. Funds across all categories boast of stellar returns. Sample this: The mid and small cap category has averaged 77 percent return over the past 12 months, with the best fund delivering a staggering 120 percent. The tax-saving funds also average an impressive 51 percent, including a fund which has soared 92 percent. Many of the table-toppers are funds of proven quality and track record. However, there are also schemes that are not that well-known. Some of these have rarely made it to the performance charts in the past, yet, of late, they bo...

8% Government of India Bonds quick guide

For those seeking comfort in safety of returns, the Government of India issued 8% savings bond once again comes to the fore. First launched in 2003, these bonds are issued by the government with a maturity of 6 years. The bonds are available at all times with specified distributors through whom you can apply to invest in them. Here is a quick guide to what the bond offers and its features to ascertain to check for suitability. What are Government of India bonds Government of India bonds are like any other government bonds with specified rate of interest. The rate is fixed at 8% per annum paid half yearly, or you can opt for cumulative payment of interest at the end of the tenure. You can buy these bonds from State Bank of India and its associates, other nationalized banks and some private sector banks such as HDFC Bank Ltd and ICICI Bank Ltd, among others. The bonds can be bought from the offices of Stock Holding Corporation of India as well. They are available in physical form onl...
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