When it comes to life insurance, there are several types of policies available in the market to suit your budget and age. But as you grow older, your insurance requirements change and thus, you must plan accordingly. To ensure you have enough coverage to secure your family, you need to estimate various expenses based on your dependents and debts. So, learn which life insurance plan you can purchase based on your income.
Income Is Equal to or Less than INR 50,000
If you are in your early or late twenties without any dependents or family responsibilities, this is the best time to invest in life insurance plans. This is when you can develop your saving habits and make wise investment choices. Once you begin your family, you must manage numerous financial responsibilities. So, an early investment start with life insurance plans can help you get an affordable premium rate for a high sum assured. With an income of equal to or less than INR 50,000 per month, you can select from the following types of life insurance policies:
- Term life insurance – Such a plan helps secure your parents financially in case something were to happen to you. But it is recommended to opt for a policy that allows you to increase your sum assured amount later for a higher life cover.
- Life insurance plan with accidental or disability cover – These add-ons cover come at a cost-effective rate and thus, you can consider adding them to your insurance policy for extended protection.
- Unit-Linked Insurance Plan – ULIP is a lucrative policy that gives you high returns with its investment component. Starting your ULIP investment early can help with staying invested longer.
Income Equals to or Less than INR 1.5 Lakh
By the time your income has increased to INR 1.5 Lakhs per month or less, you might be between the ages of 30 to 40 years. So, there is a possibility that you are married and your spouse may or may not be working. Plans such as purchasing a home, family planning, saving up for your child’s education, etc. begin to form. Thus, you need to have enough coverage to safeguard your spouse in your absence. Below are some suitable plans:
- Increasing your term plan – At this point, you must increase the sum assured of your term plan for additional coverage.
- Endowment or money-back policy – As you must be planning for a child or need a retirement corpus, such plans with a savings component can go a long way in helping with wealth creation.
- Whole life insurance – If you want to secure your family such as senior citizen parents or siblings who aren’t financially independent, this plan is a suitable one.
Income More than INR 1.5 Lakh
With an increased income of more than INR 1.5 Lakh per month, you must now be in your fifties. A major chunk of your money must be going towards saving up for your children along with some loans and debts. As you are nearing your retirement, you cannot take any risks or make new investments because you also need some corpus for retirement planning. So, following are some suitable insurance options:
- Pension plan – This is perfect for someone who wants a regular or a lump sum payout as a pension. You can consider various insurance plans for lucrative returns.
- ULIP policy – You can continue to invest in your ULIP by switching to debt funds, as you cannot afford to take high risks anymore.
- Increase your whole life insurance coverage – If your children aren’t financially independent, yet, then increasing your sum assured can be helpful. In your absence, the payout can be used to manage their expenses and pay off any pending loans.