In accordance with the Insurance Regulatory and Development Authority of India's (IRDAI) vision of "Insurance for All by 2047", life insurance companies have been emphasising the importance of financial planning to ensure a secure future for individuals and families.
Financial planning is fundamental for those who are getting married or becoming parents. This phase of life comes with great responsibility, and providing a financial security net for your loved ones is crucial. The proactive approach empowers people to take control of their finances and work towards building a stable future.
When adding life insurance policies to their respective portfolios, it is crucial to align them with specific financial objectives, such as ensuring your children's education. Evaluate the duration for which your children will rely on your financial support, ensuring that your coverage extends until they achieve financial independence, particularly if they are young.
Plan for coverage that assists your family in paying off outstanding mortgages, loans, and debts, alleviating long-term financial burdens. If retirement is a part of your future planning, calculate the required life insurance amount to support the surviving spouse during retirement and maintain the desired lifestyle. Integrating life insurance into your estate planning strategy is also vital, covering potential estate taxes and providing liquidity for a seamless transfer of your estate to your heirs.
By incorporating life insurance into financial plans, one can strike a balance between savouring the present and preparing for the challenges that may lie ahead. Embracing life insurance as part of a comprehensive financial strategy empowers one to safeguard their family's future while cherishing the moments that make life extraordinary.
To secure their family's future, both parents should prioritise obtaining sufficient life insurance coverage. Adequate coverage should encompass replacing lost income, clearing outstanding debts, and providing funds for immediate expenses in the event of an unforeseen death.
Term life insurance policies are a recommended option, offering higher coverage amounts at more affordable premiums compared to permanent policies. These plans provide coverage for a specific period, making them suitable for parents with young children. For added financial protection, exploring policy riders such as critical illness or disability income riders is advisable.
Additionally, it is essential to regularly review and update beneficiaries to ensure alignment with the current family situation and any changes in relationships.
By aligning with the IRDAI's vision and recognizing the importance of financial planning, including savings and retirement planning, life insurance companies aim to equip parents with the necessary tools and resources to create a secure environment. Through providing education, partnerships, and comprehensive insurance solutions, their collective objective is to empower parents to take proactive steps, ensuring a safer and brighter future for their children.
Akshay Dhand, Appointed Actuary, Canara HSBC Life Insurance