How important is your family to you?
This question is often unanswerable as the amount of love we have for our loved ones is often unquantifiable. But for most of us, your family is important enough for you to have a life insurance to protect them at all costs, even if there is a stage when you can’t be around.
What is a life insurance?
A life insurance policy is a protection for your loved ones if you have to leave them behind because of something unfortunate. A life cover gives your family a financial aid to stay financially afloat and keep their standard of living after you’re gone. This way, you can provide for your family even in your absence.
But what if at some point, you feel like your insured amount is not enough?
You might have purchased a house and there is a loan you’re repaying, or you simply think your family will need more money for their protection- in these scenarios, a supplement to your life insurance could become useful. A supplemental life insurance coverage gives exactly that.
What is a supplemental life insurance coverage?
You might already have a life insurance, but it has become inadequate, or you have your employer providing you with a life insurance, but you think a little more insured sum is required – in instances like these, you can go for a supplemental life insurance.
As the name suggests, it supplements your life cover with an additional policy. The supplemental policy will have its own term and could have its own riders or add-ons.
If you are looking to supplement your life cover, one important question you could have in your mind would be about the adequate amount of coverage required.
The final choice comes down to your financial and life status. Below are some pointers which will help you assess that –
- How big is your family?
If you have a large or joint family that depends on your income as well, you might need an additional cover that will be able to protect them completely. You should take into account how much they are dependent on your income and what will their needs be in the future.
- What’s your financial status?
You and your family’s financial status should also play a deciding role in determining the supplementary coverage amount. If your family doesn’t have much wealth that can protect them, it is advisable to choose an additional coverage amount that reflects the needs of the family.
- Are there any life events that are going to happen?
A marriage, a childbirth or even getting a new degree are all occasions for not only great celebrations but also a great responsibility. If you think your current life insurance is not enough to provide for these events in case of your absence, it’s wise to get an additional coverage taking these into consideration.
- Do you have debts?
Debts and liabilities can derail a family when an earning member passes away. Your life cover should be able to cover for all your debts and if you think your current coverage is not enough, going for additional coverage is wise.
Also, if you have recently taken loans and it’s not covered in your existing life insurance plan, you should consider buying a supplemental coverage with an adequate amount.
- Are you saving enough?
A life insurance policy is also a savings scheme. Unlike in a term life insurance policy, the premiums you pay will attract an interest and at maturity, if the policyholder survives the insurance term, insurance company will pay the insured sum with returns accrued over the years. This makes a supplemental life insurance plan a supplemental savings scheme as well.
Moreover, if you face financial difficulties at any stage of your life, you could surrender the insurance policy and get a refund of the premiums paid. But note that the refund will not include returns accrued and the insurer might also charge a fee, according to the terms and conditions of the insurer.
How to choose the right supplement amount?
You could come to a conclusion considering all the pointers above. You could also use a life insurance premium calculator to figure out the premiums and plans that could work for you.
The right amount of life cover is critical for your family’s financial safety. If you a re not insured yet, don’t waste time and get insured today!