Your life cover requirements keep changing during your life; your life insurance needs are not static; your life cover needs increase when you assume an additional responsibility (birth of a child or marriage). However, it also decreases as your savings for the goals grow, or you achieve your financial goals. Take this example, your outstanding home loan will continue going down over the span of the next few years. Your children might become independent, and you will not have to provide for all their expenses. In this case, if you had gone for just one big life insurance plan, you may find yourself paying a premium for the extra cover you don’t really need. Life insurance bridges the gap between the money required to meet your goals and your existing assets. This gap is expected to reduce as more time passes, as your investment corpus grows over a period of time. Moreover, there is no need to provide for that goal through life insurance, once you achieve the goal. Thus, you can see your insurance requirements go down as time passes. However, we can’t reduce our Sum Assured regularly. As a matter of fact, your life insurance plan will not even allow you to reduce the Sum assured. In these cases, a life insurance ladder can definitely help. It is much better to err on the higher side when it comes to life insurance. Even though it means higher outgo in terms of extra premium, it is acceptable if you are over-insured. However, your family can suffer financially if anything were to happen to you if you are under-insured. Through the life insurance ladder, you could increase your investment corpus through the premium saved. You would have to do some calculations to find out whether the insurance ladder is beneficial to you. One must understand that a life insurance ladder entails a few risks. Getting adequate coverage is the most important part. If the working out of proper laddering strategy is too much for you, do not complicate matters and go ahead and purchase a single policy that covers all your goals. A single policy or life insurance ladder, you would still need to invest wisely for all your long term goals.
About Shreyas Tanna
The winner of Mr. Pune 2009 Pageant, Mr. Shreyas Tanna is currently the young, dashing, and dynamic CEO of a market research company called Research N Reports in Pune. Fondly known as RNR, the company specializes in market research as well as industry analysis, and is closely associated with its parent company Absolute Markets Insights (AMI). Mr. Shreyas Tanna began his corporate journey as the Head of Corporate sales & PR at RED Entertainment while pursuing his degree for MMS (Marketing) from the MGM College of Management, Mumbai. After accomplishing the tedious task of balancing his work and education, he further polished his skills in Corporate Sales, Public Relations, Channel Development, Global Client Engagement, Strategic Consulting, and Brand Development by working with HDFC Life and ResearchMoz Global Pvt. Ltd. His dedication towards his work has even won him accolades such as the National Level Performer 2013 – HDFC Life and Mr. ResearchMoz 2015. A disciplined individual with a loving heart, he is often seen taking crisp walks with an engrossed look and a gentle smile within the premises of his company to interact with the various departments. And he will be usually followed by an adorable trail of his beloved trio of Shih Tzu babies proudly known as Gucci, Drake, and Paris. The most enticing thing that you will notice about this content and proud pet parent is his infectious positivity and the firm belief in his eyes, a reflection of his favorite quote, “LIFE IS BEAUTIFUL!”View all posts by Shreyas Tanna →