life Insurance Cover
Life insurance cover helps our family to protect against any financial worries such as household expenses, children education, mortgage payments e.t.c that the family members have to face after the death of the incomer. Therefore, life insurance is a bridge between policy holder and insurer and pays the sum to the beneficiaries after the death of policy holder. In most cases people have a wrong idea that they are wasting money through Life Insurance policy. However, Life Insurance cover is essential for your children, partner, a family or any other dependants for their future security and livelihood. Therefore, it is the most vital part to make right calculations of Life Insurance need. Amount of life Insurance depends on several factors, which are as follows.
- While you are going to calculate life Insurance needs, the most important factors that we must consider are Estate Duty and Capital Gains Tax. After your death, a situation may arise that where you have to pay Estate duty, which is a tax, determined on the basis of the market value of movable and immovable property or Capital Gains Tax which is determined on the basis of money made from deceased person's investments, property, and assets.
- The second factor that we must consider is that whether there are any outstanding debts such as car repayments, any other money lending, bonds e.t.c or not. Because if the proposer die suddenly, then all the debts need to be cleared by his family.
- The third determinant of Life Insurance cover is Income Protection. It covers the income of a family that is needed in every month to spend the life smoothly in such a manner with which the family members are accustomed.
Therefore, if you own the appropriate life insurance, your future is safe and even after your death your family will have the monetary secured life. Instead of death if you met with some accident that will lose your work ability either permanently or for the time being, you will become burden to your family and you have to carry out all the expenses like before. In order to avoid some unwanted situation you can opt for Income Protection. Such types of life insurance cover the gross salary of the proposer and if any cunning situations occur, it will start paying your salary on every month like before. On the other hand, for a business owner his income protection must cover both the personal salary and business expenses. Income protection is normally paid until your retirement or your return to work or death.Otherwise, your family has to suffer and forced to sell assets to run living expenses.
Another important factor is saving enough money for future; otherwise you will be in monetarily sticky situation. It is better to follow Unit Trust Savings, which includes children’s education, retirement plan and any other saving that you prefer to save for future use. You can deposit money monthly or deposit lump sum for one time. All these Unit Trust Savings are tax-deductible. However, before investing in any policy one should keep in mind that they don’t opt for any policy that offersboth the insurance and lumped term savings as it won’t solve the either purpose adequately.