One of the biggest gripes people have after signing up for life insurance, paying the premiums a couple of times, and eventually knowing the numbers, is that they feel what the industry likes to call ‘under-insured’. Now this could stem out from different factors - maybe there’s a commission-chasing agent who had to meet their quote for the month, maybe the person who bought the insurance did so to save on taxes, or sometimes it could simply be that they just wanted to tick all the ‘financial security’ boxes for the sake of it. But the one thing that’s common - not enough research.
When it comes to personal finance, it’s always a good idea to not be the passive buyer a product is sold to, but instead be the person who, after doing some research, knows what they want, and then goes and gets it. And research is absolutely crucial when it’s your family’s financial future at stake.
A very important factor that often gets overlooked when people buy life insurance is addressing the human life value. No, we’re not talking philosophy here, where every life is “priceless'' or “invaluable”. We’re talking tangible numbers, numbers that help you decide how much your immediate family should get, in the unfortunate event of your passing. We know discussing life insurance benefits isn’t an easy subject to broach with your family, especially in the context of the majority of Indian families, where certain topics are considered ‘inauspicious’. But if you look at the bigger picture and want your mind to be at ease about responsibility towards your family, we suggest having this discussion at least once.
Having said that, you don’t need to involve other people when calculating your Human Life Value. Because thankfully, insurance providers such as HDFC Life have easily accessible tools online where you can find that number just by entering a few details about your earnings, expenses and goals.
Once you know your Human Life Value, you’re equipped with the crucial information about the minimum amount you should be insured for, so that at least on the financial front, a sudden end-of-life scenario doesn’t cause a huge setback for your loved ones. Then comes the next step, which is choosing the right term insurance plan. While there’s no one-size-fits-all rule here, we’d suggest checking out HDFC Life’s Click 2 Protect Life plan, which allows you a great deal of flexibility and adjusts according to your needs.
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