Introduction
Covid19 pandemic has made everyone realise how important it is to have an adequate amount of insurance coverage. Just having insurance is not enough. Your insurance shall be worthy enough to cover your health expenses or support your family in case of your absence.
With the changes in income, lifestyle, health, and various other factors it’s necessary to review and update the insurance. In this chapter, we will understand why it is necessary to review your insurance in the coming new financial year.
Why Review your Insurance in New Financial Year?
The new financial year is about to start. You can think about reviewing your insurance policies. Let us understand in detail why one shall review the insurance needs in the new financial year.
- Change in Income
Change in income can be due to two main reasons. One is an increment given in the company or you have changed your job which pays you a higher income. Whichever may be the scenario, with the increase in income it’s time for you to review your insurance.
The increase in income leads to an increase in expenses and net worth. So it’s time to assess the life insurance coverage. Human Life Value (HLV) can be considered while deciding on life insurance coverage.
Life insurance cover must be 7-10 times your net worth. Health insurance must also be updated as per the increase in income.
- Got Married
If there is a change in your marital status, then it’s time to review the insurance coverage and make changes accordingly. If you were single and have now got married, then do take care to add your wife to the family floater health plan. If you want to have higher coverage then you can go for an individual health policy also.
With marriage, your responsibilities towards your family also increase. Opt for a term plan if you haven’t. This will secure your family if something happens to you. In addition to this, you can plan for financial goals by taking respective insurance policies.
- Got Divorced
If you have divorced and separated from your spouse then you shall update your insurance accordingly. If you have a family floater health policy with your spouse then get her name removed from the policy. Take care to do the same with other insurance policies too.
- Have Children
The addition of children to your family brings more responsibilities. With rising inflation, it’s not so easy to raise a child in India. Firstly get your child’s name added to insurance policies and family floater health policies.
After this, it’s time to secure your child’s future. Start planning for a child’s higher education as well as marriage. You can start a money-back policy or other relevant policy for this.
- Increase in Liability
If your liabilities have increased, there should also be changes in one’s insurance portfolio. With the increase in liabilities, you shall first insure your life. You need to opt for a term plan so that your family doesn’t have to face the burden to pay loans in your absence. In addition to this also opt for disability insurance or add its rider to an existing insurance policy. Securing the family against such liabilities is necessary.
Conclusion
It’s good to buy insurance. But along with that timely review of insurance is also necessary with the changes in life. A new financial year is approaching. If you haven’t reviewed your insurance needs for a long, then this is the best time to do it.
