POSTED BY November 12, 2010 11:30 am COMMENTS (6)ON
I would like to know from all the investors that what is the right way of insurance as per you .
There are two models of calculating it
Model 1 : It takes into consideration all your future earnings . So if you are earning 10 lacs , it would take 10 times of your earning and it would be 1 crore, so it is called human capital value approach
Model 2 : This takes care of your future financial goals and make sure you are insured for the value which is linked to your lifestyle . So if you earn 50 lacs , and your future goals and lifestyle require only 2 crore in total , It would insure you for 2 crore .
Which is the right model do you think for Calculating life insurance .
Take a CASE . If a person ABC earns Rs 20 lacs per annum and his Human life value is Rs 3 crores (Total money he will earn in his life time in today’s value) , however his overall future financial goals etc can be met at Rs 2 crore , What should be his insurance amount . 3 crores (model 1) or Rs 2 crores (Model 2)
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