Sometimes Loans can make Life miserable
Over the years people buy life insurance policies and keep
paying the premiums. As long as they are able to pay the premiums or they do
not have to look at policies to get some money to meet certain requirements
they will not have any worry about their policies. But fact of the matter is
that there are few things which could create trouble for them in the future if
they have not structured their life insurance portfolio optimally.
Joy Joseph who was finding it difficult to meet his income
and expenses. His problem was that his total premium payments constituted a big
portion of his total payments. While working his financial plan, it was found
that he needed to save additionally for meeting his goals but he was infact
having shortage of funds month on month.
The returns that could be expected from the life insurance policies were
also low.
He was suggested surrendering a few life insurance policies
with an aim to reduce low yielding insurance premiums and generate monthly
surplus so that he can save the required amount towards his goals in mutual
funds and other instruments. He was also advices to take term life insurance
cover much higher that the cover offered by the policies which were advised to
surrender.
How will you know if your premium payments have exceeded desirable level? The answer is that while reviewing the policies you should check if your total life insurance premium payments exceed 50% of your savings requirements or 10% of your income. If so happens, you should considering reducing your exposure to investments through life insurance.
PrognoAdvisor.com’s Online
Comprehensive Financial Planning can help review your insurance policies and
help with advice on your life insurance requirement. It also helps you with
advice on controlling expenses and managing your loans.
Apart from the above it
will help you plan for your kid’s higher education and other goals like
Retirement, children’s marriage, buying a home, buying car, going for vacation
etc.
PrognoAdvisor.com is a SEBI Registered Investment Adviser Company and does not sell any products. Its unique advisory process which combine cash flow planning and goal planning ensures that the plan is practical.
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