Your financial health is crucial to determine if you will be able to meet your goals in life. A sound financial plan can make all the difference in your later years when you need stability and security. An insurance plan can be a solid foundation for such a plan, ensuring that your family remains financially independent even when you are not around.
However, it can be challenging to find the coverage amount which will be adequate for your loved ones’ future. Luckily, there are tools such as a term plan premium calculator that can help you decide. Using it, you can determine the premium rates, policy period, and sum assured depending on certain personal factors.
Aside from using the term plan premium calculator, there are other things you can do to calculate your future needs to plan for them efficiently. Let us discuss them in detail:
Setting Aside A Savings’ Budget
You could be starting a new career or working for some time now. You need to develop a habit of saving, irrespective of your financial situation. This is simply to ensure that you are using your money judiciously and not spending more than you can afford. You can consider investing in insurance policies like a term plan that will save you taxes and provide life cover against life’s uncertainties, such as an untimely demise.
It is a simple life insurance plan that gives you comprehensive coverage at an affordable premium. You can use a term plan premium calculator to calculate the premium you can affordably pay for the required sum assured.
Set Financial Goals
Another way in which you can assess your financial health is by determining your financial goals. It helps you ensure that you are working towards a defined purpose rather than shooting in the dark. You can set long-term and short-term goals to achieve them effectively through smart investments.
For instance, short-term goals can be fulfilled with the help of ULIP investments that give you the opportunity to cover your family’s financial wellbeing with life insurance and grow your wealth by investing a part of your premium towards a combination of debt-equity funds.
If you are a first-time investor, understanding what is term insurance can be in your best interest before purchasing a plan. Such plans are straightforward and more affordable, which may be what you need to create a safety net around your family. Remember to use a term plan premium calculator to accurately determine the sum assured you need to cover all the costs and the premium you can afford.
This is one of the most important indicators of financial wellbeing – saving up for retirement. After spending a lifetime working, you deserve to give yourself a comfortable retirement. Since this will be your primary source of income, you need to prioritize and integrate it into your investment portfolio.
Just like a term plan premium calculator, other online calculators allow you to accurately calculate the retirement income you will need to stay afloat. Leverage these tools to make objective investment decisions that are sustainable in the long run.
1. Assess Your Debt-Income Ratio
It is best to evaluate your debt to income ratio to ensure you have not bitten off more than you can chew. Ideally, you should maintain the debt to income ratio under 30-40%. It indicates that not all you are earning is going towards paying your debt.
2. Calculate Your Net Worth
Your net worth is derived by subtracting liabilities from all the assets. If this figure is positive, then your financial health is considered good. However, a negative figure indicates that you owe more than your assets.
Benefits Of Insurance
Once you are aware of your financial health and its current standing, you can take the help of insurance to build your wealth and improve your finances. The key is to get the right kind of insurance, depending upon your financial goals.
For instance, if you want to secure your family’s finances in the long run, your best bet is to start investing in a life insurance policy at an early age. You can enjoy the benefits of low premium and also safeguard your family against life’s eventualities. You can use tools like a term insurance calculator to know the exact sum assured to take care of your family’s needs in your absence and help them sail through, should something happen to you.
A life insurance policy is an important part of a person’s financial health and must be given preference over other investments, especially if you have dependents. It is an effective strategy not just to save money in taxes but also get long-term protection for your family.
Many insurance providers, such as Max Life Insurance, offer comprehensive insurance policies and tools like term plan insurance calculator to help the prospective investor make a sound decision. Be sure to compare the plans and benefits before adding them to your portfolio.