What Every Couple in Their 40s Must Discuss About Sufficient Insurance Cover?

A few discussion points for couples in their 40s around insurance adequacy

Sufficient Insurance Cover

You don’t have life insurance because you are too young. You don’t have health insurance because you are fit and healthy. You only have third-party car insurance because otherwise, you would be breaking the law. To sum up, you are underinsured. While you will rarely find such levels of under-insurance in educated India, many of us may still not be adequately insured. 

Being sufficiently insured is a continuous process. It is only through regular scrutiny and deliberation that you can ensure that you are indeed adequately insured. Here are a few aspects that you can discuss with your spouse about adequate insurance coverage.

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  1. Review insurance needs regularly – Things may have changed since the last time you bought an insurance policy. If your income and expenses have increased significantly, chances are that your household and future financial needs may have changed too. With time your liabilities may also increase. This means that your life insurance sum assured may not be sufficient anymore. Similarly, as you grow older, the medical condition of you and your family won't remain the same. With the constant rise in medical inflation, the adequacy of your health insurance coverage also comes under scrutiny. As a 40-something couple, you and your spouse must assess your life once again and make changes in your insurance policies if required.
  2. Life insurance golden rules – Another simple rule can help couples calculate their life insurance coverages. This thumb rule simply recommends that your life insurance coverage must be 10 to 12 times your annual income.

    Another approach is to take the annual income of the policyholder and multiply it with the years remaining till the person retires. So, if your annual income is Rs 10 lakhs and your age is 30, you should be buying insurance of Rs 3 crores after assuming that your retirement age is 60.

  3. Consider life needs timely – Apart from the value of a person’s life to his or her family, and the golden rules around insurance, the lifestyle of the household is also important. On one hand, you have regular household expenses including EMIs, outstanding loans, educational expenses etc. Then there are the family’s needs and goals like marriages, higher education funds, retirement corpus etc. The impact of inflation on all of these also needs to be considered. As these life needs are dynamic, a couple must discuss these regularly and readjust their insurance coverage.
  4. Research insurance products – While we know why life insurance is important, insurance costs shouldn’t overburden your budget. A family typically needs life insurance, health insurance and vehicle insurance at the very least. As a couple, you should discuss the impact of insurance costs on your budget. The cost should offer good value for money to the family. You must research the insurance products available, their coverages and policy documents. You should try to balance the assurance of your insurance products with their affordability.

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Keeping these things in mind, a couple in their 40s can reassess their insurance coverage and ensure that it remains adequate with growing age.

Also Read: 5 important reasons why women need life insurance



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