Buy insurance according to your need and income

Before buying any type of insurance it is important to know what is your requirement and income. Most of the people buy unnecessary insurance under the guise of an agent or attractive advertisement and increase the burden on their pocket. Here we are telling you how much it costs on which type of insurance is usually taken, and what percentage of the average income should be spent on which insurance.....

1 Term Life Insurance

Life insurance cover should be taken 10 or 12 times more than the income. The annual premium for term insurance for a 30-year-old non-smoker can range from Rs 10,000 to Rs 12,000. On adding factors like smoking, age, pre-existing diseases, it can be 25 to 30 thousand rupees. On an average, 2.5 - 3% of the income should be spent on term life premium.

2 Health Insurance

For a 30-year-old couple, the premium for standard health insurance in India with a cover of 5 lakhs is 10 to 12 thousand rupees annually i.e. 800 to 1000 rupees a month. It may increase depending on the risk cover, add-on benefits, sum assured. 4- 5% of the income should be spent on health insurance premium.

3 General Insurance

 Under this comes motor insurance, home insurance, cyber protection, travel insurance, insurance of electric goods or other valuables. Insurance can be taken on the basis of economic loss due to loss, theft or wear and tear of that item. But on an average it is okay to spend 3-4% of your income on general insurance.

Amit Agarwal, MD, Liability & Specialty Risk, Howden India