Life insurance is important for those who have people in their lives who depend on them financially. In case of the breadwinner’s unfortunate demise, the family or beneficiary will receive financial compensation. This payout can be a blessing for someone who is left without a stable income.
How to choose the optimum sum assured
Life insurance offers different payout methods such as a lump sum compensation, a monthly income, annual income, or a combination of the lump sum plus income. In many cases, people are not insured for an adequate sum. On the other hand, there are some who insure themselves for amounts much more than required. Calculating this sum can be tricky. Let’s take a look at ways to accurately calculate your ideal sum assured. But first, we need to understand what it is to be uninsured, under-insured and over-insured.
Uninsured: A person who does not have a life insurance policy doesn’t lose anything upon his death. But his family will be at a financial loss in…