People think that insurance is a waste of money as they believe if the premium were invested in some another avenue it would grow to a sizeable amount.
But remember life can take unexpected turns and death of the sole breadwinner of the family can impact the lifestyle and stability of the family.
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Similarly, a small accident can leave an individual with a disability, thereby impairing his life and livelihood.
Also, the treatment of any critical illness of any family member can drain the savings of the same. A couple of days in a hospital can cost you with a bill that is equal to ten years of the medical insurance premium.
Are you looking for so many complexities? No, right?
Source: Kotak Life Insurance, Kotak Mahindra Bank
Then what is the price that you are willing to pay for your peace of mind? What kind of insurance should you subscribe?
In this blog, we seek to discuss the types of insurance plans a 30-year old individual can subscribe for him and his family’s well-being.
We believe it is extremely important you start planning your insurance by your 30s. Let us discuss the four most essential policies you should subscribe to, and the premium you will be required to pay if you subscriber earlier.
1.Life Insurance Coverage
If you start your policy when you are 30 years old for a 30-year term with a sum insured of Rs 1 crore, the monthly premium comes at Rs 600.
Remember a life insurance coverage acts as a lynchpin of your financial planning.
In case of a mishap, the money will support your family and help them achieve goals even in your absence. While you may be a good investor doing every right thing such as saving for retirement, for children’s education/marriage/etc.
But have you ever thought what happens to these goals if you are not around?
Thus, you need to secure your dependents by opting for life insurance.
Ideally, you should choose for coverage of at least 6-8 times of your monthly income. The coverage amount should be significant enough to settle all your outstanding loans and provide for big-ticket expenses along with living expenses.
2. Health Insurance
Health is wealth a well-known proverb.
While having healthy meals, and exercising are required to keep yourself healthy, never forget to skip health insurance.
Remember, a medical emergency can come anytime to anyone in the family, and it is your responsibility to ensure everyone is secured.
Source: Bankbazaar Insurance
Thus, the second policy that you should opt for is a health insurance to cover yourself and your family. For a family of four, health insurance of Rs. 5 lakh costs Rs. 1000 per month.
Next comes, the accident and disability cover.
3.Accident and Disability Cover
We are very sure that you must be using your helmet while riding a two-wheeler and also using a seat belt while driving a four-wheeler.
But there are possibilities that the person on the opposite side of the road makes a mistake and you can land up in an accident. Accidents are not predictable, and come uninvited.
Thus, it is essential that you protect yourself and your family from any financial burden should there be any such situation. A cover of Rs. 25 lakh for accident and disability would not cost a fortune and is available for around Rs. 200 per month.
4.Home and Contents Coverage
Assume you are out of India enjoying your vacation in Seychelles, and suddenly, your phone rings and your neighbor informs of theft in your house.
You leave your vacation midway and come back to find that your jewelry, cash, electronics worth Rs.10 lakh is missing from home.
Will that be an ideal situation?
How about getting this insured so that next time any such thing happens you are not worried much.
Source: Compare The Market
You should always opt for your house coverage and content coverage. A typical house and content coverage of Rs. 50 lakh and Rs 10. lakh will cost you Rs. 250 per month only.
Wrapping it Up
To conclude we have discussed the four critical insurance coverages, you should opt for in your 30s.
Also, there are other coverages which you might be having already, which are vehicle insurance and the likes. You see that these insurance cost you nearly Rs. 2000 to Rs 2500 per month.
While you must be wondering if it is worth investing this sum, let us tell you that it surely is.
Every individual should plan their finances in a way that their family is secured during thick and thin.
The coverage should be dependent on the style of lifestyle that, you would want your family to lead in your absence. Remember, insurance is not meant to provide you returns, but it is for risk coverage.
So, do not try to look for products where you are getting some returns. A traditional and most valuable insurance product is one that provides risk coverage only.
Disclaimer: The views expressed in this post are that of the author and not those of Groww