How do I decide on the amount of life insurance cover I need

If you want to choose the right amount for life insurance cover, you must remember that the primary objective of life insurance is to offer financial support to your immediate family or dependents, if you meet an untimely death or are unable to generate income due to a permanent disability. An ideal life cover should be enough to provide your family with sufficient income to maintain a reasonable standard of living.

To ensure a thorough life cover and also secure your family’s future, you must have a smart and informed decision. You can begin by identifying some of your top-most financial goals and then calculate the life cover you will need for meeting those goals.

Here are some of the top factors to keep in mind while deciding on the amount of life insurance:

• Current Yearly Income
• Current and possible future Liabilities (financial)
• Top-most Financial Goals
• Age while purchasing the policy
• The period for which you want to be covered

One of the other important questions you can address while choosing a life insurance amount is how much can you afford. Depending on your capability to pay an annual premium, you can choose a certain band of insurance. The higher the cover, the higher the premium you will have to pay.