The jitters of a wedding day are real. Most of us would definitely agree in affirmation to that!
Now, picture this: It is the wedding day, and what if the dulha (groom) only goes missing? That’s enough to send everyone into a scurry, isn’t it?
Well, the dulha is definitely found, though.
But where exactly was the dulha? He was sitting huddled in the corner of the terrace, engaged in a ‘tiff’ over the mobile with his would-be wife, Shagun.
The reason for ‘tiff’: a lehenga that had no alteration space! A bit of adequate planning, well in advance could have saved the day. We all will agree with that, isn’t it?
Now, drawing a similar parallel in life, what if you are told that insufficient life cover is most likely to introduce us to face some tough situation?
On the other hand, a bit of adequate planning related to life cover can go a long way in influencing your lifestyle and future decisions related to either marriage or children.
So, let’s understand why life cover is crucial for anyone and everyone.
Insurance Cover: Tax-Saving Tool and Much More
Insurance is a good tax-saving tool? True, however, there is more to insurance. It can serve as a crucial financial tool where you can buy a variety of insurance policies to save money on a lifelong basis.
An analogy could be found with a fire extinguisher. You are required to keep it in your home or office—perhaps you may never have to use it. However, in case an actual need arises, you will feel so self-secured that it is handy. Similarly, if you have unpredictable expenses such as car repairs or medical bills cropping up, insurance can emerge as a financial lifesaver.
There is no way you can avoid the unexpected tragedies of life, and of these, death is the most unexpected. If your family is financially dependent on you, you need to make sure there is enough financial security for your loved ones. This should be the situation even after you are gone. Whether it is paying for household expenses, securing your offspring’s future, or making sure your parent or spouse gets the much-needed financial support to maintain their standard of living, life insurance can help compensate for the inevitable financial consequences when you are no more. Life insurance can also help your loved ones repay any outstanding debts or mortgages you left behind.
You may perhaps believe that you can save enough money to replace your assets, should anything happen to you. However, considering the uncertainties that life is all about, have you ever wondered what if something happens to you? Will you be able to provide a financially-secured life for your loved ones? The question may, all of a sudden, come as a revelation to most of us. However, to beat such a scenario, life insurance should always be an integral part of your overall financial plan.
Also, it remains important to calculate the Human Life Value (HLV) to ensure that one is not underinsured. This is as good as being half-prepared for a battle.
A Quick Take on Human Life Value (HLV) Calculator
Human life value is the monetary value of a person’s life. It is determined by the total benefits others depending on him/her may expect to derive from future efforts made by the person whose life is being valued. Evaluating human life in this way is crucial, especially in cases where there happens to be a sole breadwinner as it determines how much insurance suffices to cover both the present and future expenses of the dependents.
The Human Life Value (HLV) Calculator helps you identify your life insurance needs on basis of income expenses, liabilities and investments and secure your family’s future.
Assessing Human Life Value
Human life value is the monetary worth placed on human life. Assessing human life for its economic value is a useful tool for insurance companies to determine the amount of money a family needs in case of the death of the sole earning member. Factors like an individual’s age, gender, when he/she wants to retire, occupation, annual wage, etc, determine HLV.
These measures, which also indicate the likely financial loss, are by no means exhaustive.
How is Human Life Value Calculated
There are different ways by which human life value is calculated. The two most commonly used methods include the income replacement method and the need-based method.
Income replacement method: In this, whatever income the family needs for support is covered by insurance.
Need-based method: In this, the amount required to cover needs and goals in case of the death of the sole breadwinner is calculated. You can also calculate it online on HDFC Life website with this tool.
So, the dulha has learned an important lesson on adequate planning on his D-day. Perhaps, a lesson that he is not likely to forget for a lifetime!
Now, you can avoid getting entrapped in such a situation in life, too. If you need to be adequately insured, plan that right move today itself.