Many people plan to go for a sum assured less than 50 lakhs! There could be one main reason for it which is they think their premium amount would be too high.
While you may think you have selected the right amount of sum assured, below are few reasons why you need to opt for a higher sum assured:
Reason 1: Inflation
Prices have increased tremendously. It’s not just luxurious goods but also necessities like food and travel have increased tremendously in the past 5 years. Imagine the inflation rate after 10 or 20 years! While you may be under the assumption that a sum assured of 40 or 50 lakhs will be sufficient for your family, it may or it may not. And if it doesn’t your family members will have to compromise on their standard of living.
Reason 2: Cover your loan amount
You might have your calculated your family’s daily expenses, child’s education costs, etc. But, what about repayment of loan or EMIs? If you have taken a personal loan or a home loan, it is recommended that you opt for a sum assured that is sufficient enough to cover the outstanding amount. So that your family members are financially stable if any unfortunate event occurs to you.
Reason 3: Discounts for higher sum assured
Many have this misconception that opting for a high sum assured will lead to high premium amount. But the truth is that higher sum assured up to Rs 1 crore is affordable and not very expensive. You wouldn’t want your family to compromise just because you would have to add some extra amount to your premium.