My wife and I have a combined annual income of about ₹15 lakh. She has a unit-linked insurance plan (Ulip) with a sum assured of ₹5 lakh, which was bought five years ago. I don’t have any insurance as of now. How much cover should I take? Does my wife need to buy another plan?
—Samantha
Both of you should take an individual term insurance policy each. As a thumb rule, you should have a cover of 10 times your annual income. In term insurance, your nominee is paid only if you die. There are no survival or maturity benefits in this policy.
The current cover of ₹5 lakh in the Ulip is inadequate for your wife. Your wife will have to buy a separate insurance policy as well. Assuming you both earn equally, the sum assured each of you need is ₹75 lakh. This will come at a cost about ₹7,000-8,000 per annum.
