Adequate Insurance | Value Research Take a term insurance policy to mitigate risks to your life
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Adequate Insurance

Take a term insurance policy to mitigate risks to your life

My wife and I earn Rs 80,000 per month. We have started investing in mutual funds. How much life cover should we take to protect our two year old son or either spouse?
- Vineet Soota

It is good that you are investing in mutual funds. However, at the base of any financial plan rests adequate life insurance. As both your wife and you are earning, both of you will need insurance. You both should ideally go for individual policies and opt for a term insurance policy immediately, and you can always add more policies later to reach the optimum level of insurance required. You have the option to invest to create a corpus to manage the future needs of your son or add adequate insurance on your lives for the same. When selecting the insurance cover, apart from the income, there are many factors that influence the sum insured; the major factors that play a role are your health condition, documented family history of diseases, the existing quantum of your savings, and how much premium you are willing to pay, among others.

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