My wife and mother are financially dependent on me. Is a Rs 20-lakh life insurance cover enough to protect them?

I am 52 years old, married and have no children. I live with my wife and 76-year-old mother. They are both homemakers and are financially dependent on me. My annual income is Rs 7 lakh, and I have one insurance policy of Rs 20 lakh. Is that enough? I am always worried about this.  

Amol  

Response by Rajiv Bajaj, Chairman & MD of BajajCapital Ltd. 

We understand and appreciate your concern for the well-being of your mother and wife, as they are the two most important individuals in your family. It is a responsible approach to ensure that you have adequate financial protection for their security.

As a general guideline, it is recommended to have a life insurance policy with coverage of up to 10 times your annual income. This ensures that your dependent family members are sufficiently protected in case of any unfortunate event.

Based on this guideline, you require an additional life insurance policy with a coverage amount of Rs 50 lakh. In such cases, a term insurance plan would be most suitable for you. Term insurance offers high coverage at an affordable premium, making it an ideal choice for individuals seeking comprehensive protection for their loved ones.

One of the key advantages of a term plan is its low premium cost, especially if you do not have any pre-existing medical conditions such as obesity, diabetes, hypertension, etc. If you are in good health, the annual premium for your life insurance policy will likely be affordable, ensuring that you can comfortably meet the financial obligation while enjoying the benefits of extensive coverage.

By opting for a term plan, you can provide your family with the necessary financial cushion in case of an unfortunate event. In the event of your demise during the policy term, the insurance company will pay the sum assured (coverage amount) to your nominees, enabling them to meet their financial needs and obligations without any significant hardships.

It is important to note that while choosing a term plan, you should carefully evaluate various factors, such as the insurance provider's reputation, claim settlement record, policy features, riders (if any), and the plan's flexibility.

Comparing different insurance providers and their offerings will help you make an informed decision and select the most suitable policy for your requirements. Before finalizing any life insurance policy, we recommend thoroughly reviewing the terms, conditions, and exclusions.

It is essential to understand the coverage details, claim settlement process, premium payment schedule, and any additional features or benefits associated with the policy.

Suppose you have any specific concerns or queries. In that case, it would be best for you to contact the insurance provider or a qualified financial advisor who can provide personalized guidance based on your circumstances.

Taking proactive steps to secure the financial future of your loved ones reflects your responsible and caring nature. By obtaining a term plan with the appropriate coverage amount, you can protect your mother and wife against unforeseen circumstances, providing them with the financial stability and support they need.

I wish you all the best in your pursuit of securing the well-being of your family.