As one of the oldest, most significant and widely celebrated festivals in the Indian subcontinent, Deepavali marks the triumph of good over evil, light over darkness in our lives. Every year, we celebrate the ‘festival of lights’ by lighting up lamps, feasting on sweets, and exchanging gifts with our friends and family. It’s also an important time for us to remember to illuminate our loved ones’ lives in the most meaningful way. And what better way to drive away the darkness of future uncertainties than with a life insurance policy to help keep the lives of loved ones illuminated, even in our absence.
But for the light of life insurance to shine bright, it is essential to keep the flame alive with the right sum assured. Life insurance is all about having adequate financial protection against life and health risks to ensure your loved ones’ economic well-being. At the time of buying life insurance, you can protect your loved ones with the right insurance cover, and adequate sum assured, creating a financially secure future for them.
Get enlightened about your real value with the right sum assured - an amount offered to policyholders in case of incidents like death, disease, or maturity. Often, we do not buy adequate sum assured because our understanding of life’s value may not be the most ideal.
Here are three ways of evaluating life and embracing the right sum assured:
a) Know your life’s Real Value
As individuals, we often assess our worth based on the financial support we bring to the house, while overlooking the value we bring to our family and lives of loved ones through just encouragement, pure love, and sometimes just by our mere presence. While we celebrate our friends and family’s smallest achievements, we often undermine our real value on most occasions. When buying life insurance, we tend to place a lower premium value on ourselves, thus purchasing a lesser sum assured cover and risking our family’s future financial stability.
The right understanding of your real value goes hand in hand with your loved ones’ level of financial protection. Therefore, it is imperative to understand and embrace your real value when determining the sum assured on a life insurance policy.
b) Calculate The Right Sum Assured
A term plan purchase is an easy way to build a financial safety net around your loved ones. The need for comprehensive term plans is stressed even more in the current COVID times. As per Max Life’s India Protection Quotient Express survey, 83 per cent of digitally savvy respondents believed that the situation demanded one to be more proactive about financial planning.
Therefore, besides choosing the right term insurance plan, having an adequate sum assured is a must. Determining the correct sum assured should be a carefully planned activity. One must thoroughly consider factors such as future working years, regular annual expenses, life goals and overall investments, savings, and liabilities.
For instance, if you are 30 years old and expect to retire at 55, your future earning years are 25. It is likely to impact the choice of life insurance coverage as well as the sum assured premium. Secondly, there are various landmarks in life for which you need to prepare financially. By calculating these expenses in advance, you will be able to arrive at a sum assured better suited to meet your life goals.
c) Ensure financial well-being of loved ones
The aspect of undervaluing oneself also manifests in the way we plan our finances or invest in protection plans that are meant to secure our families in our absence. The tendency to undervalue oneself leads people to focus on other aspects rather than the sum assured while buying an insurance product.
As individuals, responsibility for our family’s future financial security, becomes our duty to buy the right amount of life insurance coverage needed to shield dear ones from life’s various uncertainties, and helps maintain a dignified standard of living.
This Deepavali, take a step towards a brighter tomorrow by rethinking and realigning the approach of undervaluing or taking yourselves for granted. By rightly understanding and evaluating your life’s value when buying life insurance, you can protect your loved ones with a sound financial future.
The author is Director & Chief Marketing Officer at Max Life Insurance