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Valueraj Associates Private Limited

Personal Associates for your Personal Finances

Insurance Planning

Insurance Planning

What is Insurance Planning?

You work hard to earn an income, provide for family expenses, invest the surpluses to accumulate assets and meet your financial goals in future. However, various unwanted events can hamper your efforts and become risks to achieving your goals. Some of the risks lurking around you are death, disability, illness, damage to property etc. These events can deplete your assets considerably, disturb your plans and discourage you in achieving your goals.

Therefore it becomes extremely important to safeguard your efforts against the possibility of such risks. Insurance is the means for it and acts as a hedge against such risks. The purpose of Life Insurance is to ensure that in the event of death, the dependents are provided a monetary compensation to lead the life with lifestyle as is prior to death. In the case of non-life insurance, say Health Insurance, the purpose is to compensate you for expenses incurred on treatments and medicines.

You may already have some insurance policies and paying premiums regularly. However, you may not have appropriate policies and adequate covers on them. Insurance Planning is about identifying the insurance types you need and the cover you must have on each of them. It is about ensuring that you will be able to tackle risks freely if they occur and enabling you to pursue your plans seamlessly to meet your financial goals.

Insurance Planning is in fact a part of Financial Planning. It is a process, not a product. This process involves (a) collecting the data about your dependents, your current assets and liabilities, household and lifestyle expenses, existing insurance policies (b) analyzing the data for insurance requirements (c) Identifying the insurance types required and (d) calculating the cover for each of them.

The outcome of Insurance Planning process is a ‘Insurance Plan’ document. This document spells out the details on insurance types and respective covers you must buy to meet your insurance requirements. If you follow it, you are adequately prepared to meet any unexpected events in life without any financial loss to you.

Why should you have an Insurance Plan?

Insurance Plan makes sure that you are neither under-insured nor over-insured but aptly insured. A few but not all benefits are:

  • You will exactly know what are the insurance types you need e.g. Life Insurance, Health Insurance, Personal Accident Insurance, Property Insurance etc.

  • You will know what are the insurance policies you currently have and how useful are they to your situation.

  • You will know whether you need Life Insurance or not. If you have significant assets, you may not need it. If not, what should be the additional cover you must have on your death.

  • You will know whether you need Permanent Disability Insurance or not. If you have significant assets, you may not need it. If not, what should be the additional cover you must have on your permanent disability.

  • You will know what should be the cover for Health Insurance of your whole family.

What Insurance Planning is not?

Here are few things that Insurance Planning is not:

  • Insurance Planning is not about finding insurance policies that can make you only save taxes.

  • Insurance Planning is not about mixing insurance and investments.

  • Insurance Planning is not for insurance agents. (It is for you!)

  • Insurance Planning is not for irresponsible and reckless people.

How can we help you?

We are Certified Financial Planners by qualification and Mutual Fund Distributors by profession. We provide ‘Insurance Planning’ service to individuals and families. However, we provide this service only as incidental to distribution of Mutual Funds as we believe proper insurances should be in force before embarking on MF investments.

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