Here are some of the key reasons why buying insurance is not a one-time activity:
- Inflation changes the market dynamics: Even if you have an existing insurance cover, it might not be adequate. Based on the risks, debts and financial goals, the insurance needs of a person change over time. As you go through the various stages in life, you need to revisit your goals and re-examine your life cover needs.
- Higher education is getting expensive: Quality education comes at a price and you would not want to compromise there. Insurance can help you build a corpus for your child’s education needs (which should be at least 8 to 10 years away). The investment component of a ULIP allows you to start saving a small amount every month while the life cover component ensures that even if you are no longer there, your child receives a lump sum amount that can be used for his or her education.
- Healthcare costs are rising: Along with education, healthcare is an important and unavoidable outflow for any family. Hedge against the rising healthcare costs by periodically revisiting your health insurance sum assured. Also, mitigate risks by opting for riders like critical illness and disability.
- Retirement planning is tricky: Life is uncertain. You can never be sure about the amount that will be enough for your retired life. While everyone wants to retire early, it is a risk. You might not be able to accumulate enough to last you a lifetime. On the other hand, living too long is also a risk, for you never know how many years to plan for.Revisit your retirement plans periodically to ascertain that you are on track to maximize your retirement corpus.
Macro-economic factors such as inflation, lifestyle choices, health, and household expenses continuously influence your finances. This is why you should revisit your insurance plan regularly and reassess your needs.