How much life insurance do I need? The answer explained here in just 5 brief points

Director, A&M Insurance Brokers, Sumit Wadhwa told Zee Business Online, ''The person should seek the help or advice of an insurance agent or broker to get the best cover plan suitable for his/her needs. The agent will understand the insurance needs and suggest the right type of cover plan''.

The amount of life Insurance coverage one needs depends on the various factors: Pixabay

Life insurance is certainly the best financial support that covers the individual's life, protecting them from emergency circumstances. Have you ever wondered how much insurance you really need or how much life insurance is actually good for you and your family? How to make a decision whether you require an Insurance plan or not? Well, there are a number of factors that should be evaluated before deciding the amount of life insurance needed. Too little life cover could result in the family not being financially supportive in case of the unfortunate death of the policyholder or wage earner of the family. While too much insurance would mean high amount of premiums at the cost of other necessary life-stages and lifestyle spends.

Shedding light on this issue that is of critical importance for investors, Director, A&M Insurance Brokers, Sumit Wadhwa told Zee Business Online, ''The person should seek the help or advice of an insurance agent or broker to get the best cover plan suitable for his/her needs. The agent will understand the insurance needs and suggest the right type of cover plan''.

This is why it becomes highly essential to calculate the right amount of life insurance as per the right needs of an individual. So, as far as the question, 'how much life insurance do I need?' is concerned, here is the answer. The amount of life Insurance coverage one needs depends on these factors:

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1. How many dependents does one have in the family:

An individual should make a decision on how many dependents, he\she has in the family. More number of members in the family would require a larger financial support in case of an emergency, while less numbers of family would require a lesser support.

"There are financial commitments and dependencies like, children's lifestyle, their education, marriage, retirement planning etc. One should always determine the correct requirement before making a decision on suitable plan.'' Wadhwa mentioned.

2. What kind of lifestyle one wants to provide to family members:

A decision should depend on the lifestyle, an individual wants to provide his\her family. Well that completely depends on the choice or affordability for premiums. A high quality lifestyle in case of a death of wage earner would require a larger plan, while cover to support only the basic requirements would come with a lesser premium.

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3. What are the investment needs of an individual:

The investments one looking to make, retirement planning, financial aid after the particular period, any other requirement at that age are some factors that should be kept in mind before taking a plan.

4. What is the affordability of an individual:

Well, affordability plays the most important role. There is no point of hampering your present for securing your future. The premiums should depend on your affordability. A premium out of reach could disrupt the current lifestyle of the family.

5. How much financial support one needs for children’s education:

Children's education is also a really important to make a decision on insurance value. Hence it should be kept in mind prior to decide the exact cover plan and its valuation after death or disability.

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Life Insurance Corporation of India (LIC)