How much insurance coverage do you have now? 5lakhs or 10lakhs? Did you know this won’t last more than 3-5 years in the present day if you have 2-3 people dependent on you even if living frugally?
Logic says you need 20 times your annual income to provide support for your family in your absence. Well, you are the better one to know your family expenses than me.
Well, actual logic that I say is you need to live in a way the amount is untouched and you live of the interests. That is if you are living behind insurance of 10lakhs then all your family should use at max 60,000/- in a year assuming you get 6% interest rates. So your family will get continuously 60k every year.
Suppose you want your family to get 50,000 per month after your death then you need insurance of about 1 Crore. The formula is simple.
Insurance Required = [Annual Income required] * 100 / [expected interest rate])
i.e. if you need 50,000 per month = 6lakhs in a year.
then you should have an insurance of about
6lakh * 100 / 6 = 1Crore.
I am covered for 2 crores. What about you?
Contact me if you need help in selecting the best and low-cost insurance products available online.
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