Right Insurance: Life insurance protects your loved ones from financial difficulties in case of any untoward incident. In such a situation, people do not deny that they should have a life insurance plan, but in most cases these people are unable to decide how much life insurance they should have. In fact, there are many factors that decide the amount of life insurance you should buy.

Minimum security needed

Even when the head of the family (whose income runs the household) is no more, it is essential that his family continues to receive a fixed amount every month. Suppose, the current expenditure of a family is Rs 25,000 per month. In such a situation, the earning member of that family should have life insurance of such an amount that the interest income from that family continues to get Rs 25,000 every month so that their expenses can be continued.

If a person wants to meet the financial needs of his family, considering the possibility of reducing the purchasing power of the rupee due to rising inflation in the future, then he should take an insurance plan of higher amount. It is said that till date no widow has complained that her husband has taken insurance of more amount.

As family responsibilities increase on an individual, the need for life insurance increases. In such a situation, keeping in view the circumstances and circumstances of the family, you should review the sum insured from time to time, to ensure that the sum insured is sufficient.

The maximum requirement of Life Sum Assured is in the mid-phase, when one gets married and has children. In other words, you should buy life insurance as long as its assets are less than its needs.

Human Life Value (HLV)

The life of your loved ones is precious. But in order not to face financial problems in future, it is necessary that the price of their life should be fixed in rupees. Human Life Value (HLV) is the potential income of an insured person. In other words, it is the income that a person can earn for the rest of his working life.

How to Calculate HLV

First of all calculate the total annual income of that person. After that subtract from that the amount that he will spend on himself. The amount left will be his HLV. Suppose a person earns Rs 15 lakh every year and spends Rs 4.5 lakh on himself. In such a situation, he earns 10.5 lakh rupees every year for his family. In such a situation, in the event of his absence, his family will need Rs 10.5 lakh every year. You should keep this calculation in mind while taking insurance for yourself.

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