Your family is what you live and work for; therefore,ensuring their financial security and leaving behind a valuable legacy requires wise financial planning for short-term and long-term alike.
While creating your household budget,it is crucial to include suitable insurance for you and your family. Once you have subtracted all the regular monthly expenses, you should set a target to use the money left in savings.
Death is inevitable, and as you die, your income dies with you. Your family will need financial support if some unfortunate event happens. Therefore, it is essential to get yourself covered by a term life insurance to provide your children with quality education and future even when you are not around.
Tracking Your Budgetand Including Insurance
The right financial planning begins with building a necessary household budget. Creating a household budget helps you understand and analyse where you are spending your money every month and therefore allows you to plan for saving. By having a household budget in consideration, you can easily track your spending, preserving, and more easily monitor and reach your financial goals.
The final step should be tracking your variable spending in your budget. It refers to the expenditure you have control over and can if necessary. The variable expenses include necessities that you can delay such as buying new clothes or paying for home renovations.
Tracking variable costs will allow you to see where you’re spending the money that is “not spoken for” by fixed costs, payments and savings. Begin your planning by making a list of variable spending categories.
One of the most important financial decision is how you make investments for a long-term future. Insurance plays a significant role in providing your family with a secure future in case a misfortune occurs.
You must include paying for life insurance in your household budget.You may not realise the importance of insuring yourself in pleasant times, but when times get rough, you and your family will need financial support.
Why Term Life Insurance?
First, we need to understand what a term plan is? It is the simplest form of life insurance. This plan covers your family from the risk of death for a limited period. It helps your family continue their living even after a significant setback. A term life insurance plan is the most affordable form of life insurance.
A Term Life Insurance can help ease any financial burden on your dependents in times of crisis.
Among all life insurance plans, a term plan has the lowest premium. Low premiums allow you to afford an optimal sum assured for you to ensure a secure future for your family.
Given the vast difference in the premium rates, getting comprehensive coverage under any life insurance plan, except term life insurance, is difficult.
One must get a life insurance coverage of 10 times your annual income,enough to meet the future living expenses and value of financial goals after accounting for inflation. Only term life plans can provide you with enough coverage without burning a severe hole in your pocket.
Term life insurance plans from reputable insurers such as Max Life Insurance provide financial protection and safety to your dependents in the most unfortunate events.
The rising cost of healthcare and medical facilities have made having insurance mandatory.
A term life plan offers critical illness cover to avail quality treatment for life-threatening diseases. The premium payable for your term life insurance plan will help you save taxes. Critical illness benefit premium saves tax for you under Section 80D, while life insurance premium comes under Section 80C of Income Tax Act.
Besides including all day-to-day expenses in your monthly household budget, insurance must be given equal importance and select the most suitable term life plan for financial protection.
Image source: Shutterstock
