Accurate Calculation of Sum Assured for Life Insurance is Important.
By now you all must be aware of the importance of a Life Insurance Policy in everybody's life.
But are you also aware of the importance of estimating the amount to be invested on the policy or the sum assured for it? This is a common mistake made by Indians before purchasing a life insurance policy finally leading their family to go through huge financial difficulties after the death of the insured.
To get the correct estimate of the sum assured, firstly calculate your current expenses and liabilities which includes normal expenses along with loans, etc. on your name (if you have)and include the inflation factor in it. Sum up your total assets that include jewelry, Fixed Deposits, PPF, etc. and subtract from the total liabilities. Also include any potential expenditure that can come up in the future, like children's higher education, marriage, etc. All these amounts together can give you an estimate of how much will be the sum assured for your life insurance policy.
Both over-insurance and inadequate life insurance are a waste of money and doesn't secure your family's future. Hence calculate the sum assured accurately so that it covers all the financial needs of your loved ones even in your absence.