Section VI: Income Tax and Your Financial Planning

• Ques: Get insured to secure your financial responsibilities
• Ans: Key points:
  1. If you have financially dependents than secure your life first by taking term insurance.
  2. Term insurance is the cheapest insurance and best option if you have less assets/funds and more liabilities.
  3. If you have taken home loan, make sure that you have taken term/mortgage cover so that your house is yours even when you are not there.
  4. You must have risk cover of 5-10 times of your gross annual income. The reason for this may be understood by example: If you are earning Rs.4,00,000 p.a. and you are supporting the family/dependants with 80% of (20% your personal expenses) this money then to generate this much money every year from fixed deposit etc your family/ dependent needs Rs 40,00,000.
  5. Average Indian is highly under-insured as compared to developed countries.
  6. There are 100 things you can do for your family’ financial security if you are there but through insurance you can gives them 100% financial security even when you are not there.