Life insurance is very personal and the amount of cover required varies from individual to individual. One should consider following factors to decide what policy and life insurance cover he or family required.
1. Number of family members financially depends on you
2. Your current income and premium you can afford3. Reason for seeking insurance- risk cover, income protection, savings, tax planning or investment tool.
4. The living standard and the cost of living of the family
5. Benefits to acquire from an employer sponsor life insurance plan, if available.6.Special life insurance needs i.e. mortgage payments, education fund or estate planning7. Other old age or superannuation benefits.
After careful analysis of the above mentioned factors, you will get an idea of how much cover you need. As a thumb rule, sum insured should be 6-7 times one’s annual earnings. Remember to consider your future salary increases and life standard changes to decide right coverage that suitable to meet the requirements at that time.
Read the Guidelines of Selecting Worthy Insurance Policies for more details and knowledge.