2.we have few policies of lic jeevan chhaya,jeevan saral,pension plus,wealth plus
premium for pension plus 32000pa,wealth plus rs 20000pa for three years and remaing two policies premium amt to45000

3 we have one icici prudential health plan (prm 4000) and one ulip pension plan (pr 10000 pa)

4 we have one daughter (5 yrs) .my mother in law is 75 yrs and dependent on us.

my husband salary is 8.5 lac pa.and our monthly exp are around 48000 incl home loan and car loan emi.how much should be our insurance cover.my husband age is 33 years

generally as a thumb rule , the insurance cover is around 10-15 times of annual income . So It might happen that they might not give you such a higher cover . But again , I am not sure how exactly they decide this . . but you can try to take that much cover , see what happens .

As another option , you can take a lower cover first for 20-25 lacs and then in a year or two you can take it from another , anyways you should take it from two companies .

Manish

First of all , I want to thank you and this website’s team for proving such an important and valuable guidance on financial planning.

I need help on insurance cover from your channel’s experts.Kindly consider my question through mail as I can’t be able for recording due to my office timings.

My annual Salary is Rs. 144000 /-
My monthly expenses are Rs .8000/-
I save around Rs. 48000 /- yearly
from my savings I can invest Rs. 10,000 on insurance cover yearly.

Now I have searched in some insurance companies’ web sites and in advertisements that the term insurance cover of Rs. 50-60 Lacs for 25-30 years term ,you can have by paying premium upto Rs. 10000 yearly.

In my case I am capable for paying Rs. 10000 yearly but will the insurance companies give me term insurance cover of Rs. 50 to 60 Lacs as my annual income is Rs 144000 /- ?

Can I ask for high insurance cover against my lower income from insurance companies ,as I am capable to pay their yearly premium amount, which comes under my yearly savings ?

Presently, I am single now.I have neither any insurance cover nor any investment for future and my current age is 26 yrs.

Thanks With Regards,

Mehul pathak,

New Delhi

this one is very old article and i didnt take inflation into the account ,like you did . I agree with you .

Manish

great to see you writing with so much of enthusiasm!!!!

kudos and keep it up…

Only one thing that i do not agree to is your point of Rs 32 lakh requirement for getting Rs 20000/- per month.

As you said Rs 32 lakh will fetch pre tax Rs 304000(9.5%) and accordingly Rs 240000(Rs 20000/month) after paying tax.

Rather it should be this way:

1. Rs 300000(pretax) is required for dependents(Spouse i have assumed)

2. Assume my spouse age is 25 and she is to insured for her expenses till her age of 80.

3. I feel insurance requirement is quite simple i.e. 3 lakh*55 (80years-25years) 1.65 crores.

4. Rs 1.65 crores is way above the amount of Rs 32 lakh that you mentioned in your blog.

5. i will explain how is it??? say at unfortunate demise , she got Rs 1.65 crores. what she needs to do is to consider it as 55 equivalent amounts(parts) of Rs 3 lakh each.

first year she will be using one part of Rs 3 lakh for her expenses.

2nd year , 2nd part of Rs 3 lakh + return (assume equal to inflation) on it which may amount to Rs 324000 approx (8% assumption) will be enough to meet her inflation adjusted expenses.(REMEMBER HER EXPENSE FOR 2ND YEAR WILL BE HIGHER BY 8%).

and same way 55 parts(amounts) will take care of her expenses even at the age of 80.(REMEMBER HER EXPENSE AT THE AGE OF 80 WILL BE 300000 * (1.08)^54 = Rs 19142738 WHICH WILL BE MET BY 55 TH PART OF RS 300000 DISCUSSED ABOVE)

6. As explained above, had my spouse age be say 40 and she is to be insured for her expenses till her age of 80 then requirement would have been just Rs 1.20 crores. 3 lakh*(80-40).

Manish Sir please correct me if i am wrong in interpretation?????

Regards

Sumit Gilhotra