additional life insurance coverage

Life insurance cover is supposed to provide you and your family with financial protection in the light of uncertainties related to life. One’s life and responsibilities change continuously, which causes their financial obligations to change too. If you find that your situation has changed from the time you bought the life insurance plan, it is worth reviewing your life insurance coverage. You might want to ensure that your financial responsibilities can be taken care of by the death benefit and that your family can maintain the lifestyle in your absence. Normally, you might consider an increase in your life insurance coverage if you have a consistent financial commitment - maybe you are welcoming a new child to your family, or you’re buying a new house, or co-signing a student loan for your child.

How much additional life insurance do you need?

Once you have made up your mind about the need for additional insurance cover, the next step is to assess the magnitude of such addition. What is the gap between the current coverage and the ideal cover that will serve your needs? These are tough questions to ask and answer because life insurance deals with death. But a starting point to ponder over is this: How will my family survive if I were to die tomorrow? From there, enlist all your current financial obligations, add to them all potential future obligations - from childcare, housing, grocery, bills, debt, to child’s education, and other lifestyle expenses. The logic is simple: if you pass away, your loved ones will be left to tend to the newly acquired expenses like mortgage payments if you recently bought a house. Or if you have an ageing parent who requires more assistance and health care. Putting all these figures together will give you a number that’ll act as a governing reference figure for you to get commensurate life cover.

Following from this figure, you can decide whether you need to buy more, and how much.

How to increase life insurance coverage?

Many life insurance plans now have a feature called ‘top-up premium’. The policy document usually has details on charges or minimum and maximum amount of ‘top-ups’ permissible. Top-up premiums are a way to buy more coverage under the same insurance policy. The only catch is that they have a lock-in period.

The other route of increasing life insurance is by opting for the riders that you can avail when you buy the policy, or afterwards when you feel the need to. You can further strengthen your financial security through an add-on insurance plan that provides you with additional insurance cover along with your regular life insurance plan by paying an additional nominal premium. Riders help upgrade the scope of protection provided by the term plan.

Future Generali offers the arrangement of joining riders to your term plan , thus expanding the level of security. For example, term plans offer the ‘Accidental Benefit Rider’ alongside the basic term plan where you get extra insurance benefit in the event of your demise due to an accident. There are the Accidental Permanent and Total Disability rider, the critical illness rider and others. The premium pertaining to health-related or critical illness riders shall not exceed 100% of premium under the basic product, the premiums under all other life insurance riders put together shall not exceed 30% of premiums under the basic product and any benefit arising under each of the above-mentioned riders shall not exceed the sum assured under the basic life insurance cover.

Sometimes riders can only be added to the policy at the time of purchase or renewal, so you will have to check for specific details when you buy life insurance online. Apart from the Future Generali Accidental Benefit Rider available with Future Generali Flexi Online Term Plan as explained above, you can opt for the Future Generali Non Linked Accidental Death Rider available with Future Generali Care Plus.

The rule of thumb on the apt amount of life insurance coverage is that 20 to 25 times of your annual income is enough for a family to sustain their lifestyle and not have to compromise on their important life goals. You should aspire for maximum protection for the family and adjust your insurance coverage timely.