My economic value towards my family can be calculated in a number of ways. Taking my future earning potential and calculating the present value of that comes to Rs 40 lacs approx. However on the basis of the present monthly expenses and the amount required to maintain that lifestyle should come to Rs 25 Lacs approximately.
For a normal endowment insurance policy of Rs 25 lacs, one has to pay more than Rs 100000. But I have a basic cover of Rs 13.5 lacs and accident cover of another 11.50 lacs by paying a premium of roughly Rs 16000 only. And all of them are LIC policies. Surprised? Here's the list of my policies a/w premium and the type of policy.
1. Basic cover Rs 3 lac, Accident cover Rs 3 lac, Bima Kiran: a term assurance plan with premium back plus extended cover after maturity, Prem: Rs 3000
2. Basic cover Rs 4 lac, Accident cover Rs 2 lac, Jeevan Griha: Triple cover insurance, Prem: Rs 4500.
3. Basic cover Rs 5 lac, Accident Rs 5 lac, Anmol Jeevan, Pure term assurance,no maturity value, Prem: Rs 2300.
4. Basic cover Rs 1 lac, Accident Rs 1 lac, Endowment, Prem: Rs 2600.
5. Basic cover Rs 50K, Accident Rs 50K, Money back, Prem: 3600.
Obviously my decision on the policy mentioned in serial 4 & 5 is a wrong one. I could have insure myself for another 10-15 lacs from that amount. However assuming that the only way I'll go away from this world is an accident, a cover of Rs 25 lacs should suffice.
As you age, the premium of the term assurance policies increase drastically. So I don't know how much I've to pay for the same term policy I had taken 5 years back. Hopefully I had my timing right. Ideally the time of taking an Insurance cover would be when you start a family of your own.
But this blog helped me in reviewing my Insurance. I feel that I don't need another insurance advisor. But wait, my mortgage loan is not insured. Maybe time to get a mortgage insurance and an advisor should get a call from me!