|Insurance Buying Tips #1: Shop smart|
|When looking for insurance, your No. 1 priority should be to find adequate coverage. Price is important, but you’ll want to determine what kind of coverage you need first. Then you can fit that coverage into your budget and determine which carrier can provide you with the most comprehensive policy for your situation. You may be tempted to choose insurance with the lowest price tag, but if you don’t have enough coverage (or the right kind of coverage), you will see less financial benefit when it comes time to file a claim.|
|Insurance Buying Tips #2: Look for discounts|
|Once you evaluate your coverage needs, factor in your budget and find ways to save. Ask your insurance agent if there are any discounts on your coverage. Often, carriers offer discounts for things like paying your policy in full, staying auto accident-free or, if you’re in school, getting good grades. You also can save money by “bundling” multiple policies, such as purchasing a home and auto policy from the same carrier.|
|Insurance Buying Tips #3: Fill in the gaps|
|An average policy will cover the basics, but you may need to add extra coverage to meet your unique needs. For instance, you may have items like electronics or a nice piece of jewelry that would be financially difficult to replace, even with the assistance of your average renters or homeowners policy. You may want to add additional coverage for these items.|
Life has become a race where you are constantly running to achieve deadlines and targets. Here, targets and deadlines do not imply what your boss sets for you or what your work demands, instead it entails your monthly expenses, EMIs, rents, loans, child expenses and basically all your responsibilities which stop you from doing all that you love to do.
Amidst this, one major event invariably takes a backseat, which is planning for your retirement. Old age is inevitable and unavoidable, but a phase of your life where you will be able to fulfill all your dreams. Planning for this time is imperative and thus, it is high time you wake up from your sleep and start your retirement planning.
Benefits of Retirement Planning
Before you start calculating the funds you will need for retirement it is important to know how your planning will help.
- Retirement planning will ensure you have a secure life once you stop working and there is no steady income. You can opt for a pension plan so that this worry is taken care of.
- It ensures a lump sum or regular income which will guarantee you continue living the same way as you did and you do not need to compromise. Your pension plan can ensure your regular income.
- You will not need to depend on your children to take care of your needs. You like always be self sufficient and independent.
- You can take all the holidays you wanted to and basically, live your dreams and enjoy life to the fullest.
- Most of the retirement plans come with a death benefit and thus, retirement planning secures your family in case of an eventuality.
Things to Consider when Planning for Retirement
Before you start planning you need to know when you will retire and when will you start withdrawing benefits. This will also help you to plan how many years you have to save. For people who are doing their own business or are in a profession where there is no retirement age, they need to think when they will need the funds. Pension plans if taken earlier helps you to accumulate a larger corpus.
|Insurance Buying Tips #4: Purchase life insurance—you aren’t too young|
|Life insurance is essential, no matter how young or old you are. And for millennials, buying now may be a smart move because it’s cheaper to buy a life insurance policy when you’re young and healthy. This kind of insurance can help your family cover unexpected costs in your absence, including student loan debt or a mortgage, in addition to end-of-life costs. And if you have kids, a life insurance policy can also support their education or childcare expenses. Additionally, every millennial should consider long-term disability coverage, which helps you stay afloat financially if an accident happens and you become disabled and unable to work.|
|Insurance Buying Tips #5: Talk to an independent agent|
|An independent insurance agent is an essential resource when purchasing insurance—especially if this is your first time. An independent agent works with multiple different carriers, which is different from captive agents who can only sell insurance from the carrier they work for. Working with an independent agent can help make sure that you are getting the best coverage, for the best price. You’ll also benefit from independent agents’ insurance knowledge; they know how to talk you through your options and actually explain what each policy includes. An independent agent will make sure all of your assets are covered, help you find discounts or other ways to save, and be a valuable resource as your life changes and your insurance needs change, too.|
|Insurance Buying Tips #6: Only buy insurance to maintain your existing standard of living|
|You don’t need insurance for events that won’t severely strain your finances. Start with your basic needs (home, auto, business), then work your way to include other needs (cyber, liability). You can always obtain coverage later for something if you change your mind. You can minimize your risk and maximize your savings by buying insurance that won’t cause you to break the bank.|
No one can answer the question that how many years will they live post retirement but an approximate age can be thought of. Many life expectancy calculators are available online which can help. Thus, if you retire at the age of 62 and your life expectancy is say, 90 years, you know that you need to plan an income for 28 years.
You need to calculate the annual or monthly expenses that you incur, and also see which of these will remain or increase when you retire. For example when you are in your 30's you might be paying EMIs for home loan and a car loan and you will be paying for school fees of your children and their monthly expenses which is something you will not need to pay later. On the other hand, your medical and travel expenses might increase and your household expenses will increase too depending on inflation. This will help you come to a figure you will need every year when you retire. You need to choose your pension plan accordingly.
While calculating your requirement post retirement you definitely need to account for inflation. Once you know the amount you will need at the current cost an inflation rate of 6-7% will need to be accounted for. Everything will become more expensive due to rising prices and thus, what you save as per the current scenario will not last you for long. 2 lakh today will not have the same value 20 years later thus, planning for a figure which has taken into account the inflation is important.
Sources of Income:
After you have arrived at a figure of the amount you will need when you retire, you need to list down the sources of income you will have then. If you have a business or some rentals coming in, the amount you need to save will differ. For people who have no sources of income, they will need to start investing in a manner that they can cater to all their needs later.
After all the above has been done, you will know how much money you will need to have a good and comfortable life and then you can start allocating funds annually and invest in different retirement plans and investment options.
|Insurance Buying Tips #7: Ask your insurance provider what the policy doesn’t cover|
|Every insurance policy has perils that are not covered by your policy. These perils are referred to as “exclusions”, and every policy has them. Ask your insurance provider to explain the exclusions in your policy to avoid discovering what they are once you incur damages or a loss.|
|Insurance Buying Tips #8: Consider bundling several policies with one insurance carrier|
|here may be value in bundling several policies with one insurance carrier. If you’re looking to insure multiple vehicles or obtain multiple types of business coverage (e.g., liability, property, cyber), then you may want to consider obtaining coverages under one insurance provider who carries multiple products, and who may be able to offer you multi-policy discounts or loyalty programs.|
|Insurance Buying Tips #9: Review your insurance needs on a yearly basis|
|As your needs evolve, so will your insurance policy. Maybe you’ve acquired a new vehicle since obtaining auto insurance for your primary vehicle, or started operating your business out of your home, or experienced a cyber-attack during the year… Whatever the change(s), you’ll want to make sure you’re covered for any new risk exposures. Talk to your insurance provider to stay on top of your insurance needs.|