How much Insurance do you actually need?

This Section is still in the construction stage. Please visite us later for working on the Insurance Calculator

(A)

Rs.

Your annual house hold expenditure Note that we need the annual expenditure not the monthly one.

(B)

Rs.

The proportion of that annual expenditure specifically attributable to you i.e. your mobile bills and other personal expenses

(C)

(A) - (B)

Net amount of that expenditure that should be made available to your family after your death

(D)

C / 0.08

Corpus of funds required to generate that level of income. We assume a long term interest rate of 8%

(E)

Your present value of net assets including the Value of Insurance policies, the realizable value of business and other financial assets assets in case that business is to be wound up etc.

(F)

(D) - (E)

The required fund{ D - E) which invested at 6% Would provide enough cash to meet up to the living expenses of the family.

Steps to a Sound Risk Coverage Plan
Check whether you actually need an Insurance Policy? Insurance coverage is only for the earning member of the family. It product of Risk and not of Return ?
Health insurance - Tariff Chart
Life Insurance - Tariff Chart

Steps to a Sound Risk Coverage Plan

The first step is to take a Health Insurance Plan for Rs 100,000 or more per individual.

Take a term Insurance policy with personal accident cover for the earning member of the family ONLY. Other policies can wait till you have taken a pure risk cover policy. Check whether you need Insurance at all. Use the Insurance calculator to decide on the level

Take a rider with critical illness cover. As many as twelve or more diseases can be covered at a very nominal premium today. These relate to heart, kidney, organ etc and after a disease has been diagnosed the Insurance is issued a cheques within 72 hours irrespective of whether he gets himself d treated or not

Once you are through with the above steps take an investment related Insurance product or get the non-earning members insured.

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INSURANCE ONLY FOR EARNING MEMBERS

Insurance is a product of Risk and not of Return
Most of us are unaware of the kind of Insurance coverage one should have. The process is all random and arbitrary.
The following example of Mr. Avdesh Agarwal would make the process clear.
Mr. Agarwal's net worth is Rs 12,50,000 while his annual Income is Rs 210,000 .
Out of this Rs 30,000 relates specifically to him.
Thus if Mr. Agarwal dies his family would need Rs 1,80,000 per annum after his death.
- At 8% he would need Rs 22,50,000 to keep his family going
- But he already has Rs 12,50,000.
- To cover the shortfall he would therefore need an Insurance cover of Rs 10,00,000. The normal premium for an Insurance cover of Rs 30 lacs for a 30-year old male is Rs 3,000. Check for the Term Insurance rates
If non-earning members are insured just think who would pay their Insurance premium after the death of the earning member.
It may sound brutal but non- earning members should be insured only to the extent of the social and cultural costs, which we incur at the time of death of our near ones.
Some people get a joint life Insurance cover on auspicious occasions like marriage, birthdays, anniversaries etc. IS it fair to think of a consequence on auspicious days?
For returns Stocks and Mutual funds are always a better option.
NONE of the Insurance policies give a compounded return of more then 8% no matter what the savings plan are

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HEALTH INSURANCE

	PSU INSURERS					CHOLA GENERAL INSURANCE
Age/ Cover	1 lakh	2 lakh	3 lakh	4 lakh	5 lakh	1 lakh	2 lakh	3 lakh	4 lakh	5 lakh
25	1,310	2,469	3,444	4,297	5,151	1,405	2,465	3,450	4,300	5,200
30	1,310	2,469	3,444	4,297	5,151	1,405	2,465	3,450	4,300	5,200
35	1,310	2,469	3,444	4,297	5,151	1,405	2,465	3,450	4,300	5,200
40	1,425	2,683	3,743	4,670	5,598	1,560	2,745	3,850	4,800	5,700
45	1,425	2,683	3,743	4,670	5,598	1,560	2,745	3,850	4,800	5,700
50	2,039	3,900	5,553	7,069	8,585	2,255	4,000	5,935	7,695	9,140
55	2,039	3,900	5,553	7,069	8,585	2,255	4,000	5,935	7,695	9,140
60	2,322	4,458	6,388	8,179	9,970	2,925	5,250	8,045	10,535	12,690
65	2,322	4,458	6,388	8,179	9,970	2,925	5,250	8,045	10,535	12,690

	BAJAJ ALLIANZ (1)					SUNDARAM (2)
Age/ Cover	1 lakh	2 lakh	3 lakh	4 lakh	5 lakh	1 lakh	2 lakh	3 lakh	4 lakh	5 lakh
25	1,045	1,948	2,755	3,610	4,370	794	1,278	1,776	-	-
30	1,211	2,280	3,230	4,275	5,130	1,402	2,220	3,069	-	-
35	1,211	2,280	3,230	4,275	5,130	1,402	2,220	3,069	-	-
40	1,211	2,280	3,230	4,275	5,130	1,402	2,220	3,069	-	-
45	1,330	2,565	3,610	4,655	5,700	2,039	2,781	3,813	-	-
50	2,280	4,560	5,700	8,503	10,365	2,874	3,921	5,376	-	-
55	2,280	4,560	5,700	NA	NA	4,007	5,465	7,494	-	-
60	-	-	-	-	-	4,597	6,270	8,598	-	-
65	-	-	-	-	-	6,377	8,697	11,926	-	-

Only base premiums; actual premium depends on health profile
(1) Silver Health plan for 46-75 years
(2) No cover over Rs.3lakh for individuals

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LIFE INSURANCE (Term)

Age	Birla Sun Life	HDFC STD	ICICI PRU	LIC	MAX NEW YORK	METLIFE IND	OM KOTAK (2)
Annual premium In Rs (1)
25	2,890.00	2,620.00	2,662.00	2,356.00	2,110.00	2,500.00	2,200.00
30	2,950.00	2,820.00	2,751.00	2,564.00	2,280.00	2,600.00	2,400.00
35	3,310.00	3,050.00	2,878.00	3,277.00	2,920.00	3,200.00	2,900.00
40	4,310.00	3,840.00	3,917.00	4,702.00	4,160.00	4,300.00	3,900.00
45	5,990.00	5,520.00	5,269.00	7,247.00	6,370.00	6,400.00	5,514.00
50	8,790.00	8,320.00	7,964.00	11,335.00	10,000.00	9,700.00	8,330.00

(1) For a 10-year policy for a sum assured of Rs.10lakh ;figures in bold represent lowest premiums for that age.

(2) For women and non-smoking men

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