Insurance plans are beneficial to anyone looking to protect their family, assets/property and themselves from financial risk and losses. Rising inflation, increasing medical costs, increase in lifestyle diseases, uncertainty in climatic conditions are good enough reasons for people to protect themselves with a strong financial cushion.

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Apart from these reasons, consumers should keep revisiting their insurance portfolio from time to time and see if any add-ons or revisions need to be made in their policies, as per their individual growth chart and requirements.

Below are certain conditions, under which consumers should take a relook at their insurance coverage:

Increase in income

As one grows professionally, the pay cheques also keep growing. While growth of pay cheque is a sign of wealth, it is also an indication that one should do a life and health insurance review.

"With an increase in income, the sum assured should also be increased in alignment with one’s net worth. A life cover, around 10 times of one’s current net worth is considered ideal," said Indraneel Chatterjee, Co-founder at RenewBuy.

Liability increase

If liability increases, consumers should look at increasing their life insurance coverage. For example, if a person takes a home loan, they should ensure that there is sufficient life cover to round it up.

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"In case of the policyholder’s demise (during the home loan tenure), the family members should not end up paying the EMIs, or the bank should not auction the house to recover dues," Chatterjee told CNBC-TV18.com.

Increase in family responsibilities

Increase in family members, like addition of spouse, children, and ageing of parents should definitely make one re-examine their health and life insurance policies. One should reassess their insurance portfolio and fulfil long-term financial objectives like buying a home, building a retirement corpus, building their children’s future.

Inflation

With inflation increasing, it becomes a must to increase life and health insurance.

"Inflation is increasing at around 5 percent in the country, while medical inflation is expected to increase by around 10 percent this year. Thus, the insurance coverage for life and/or health, which a policyholder had five years before, will not be sufficient for them and the family in today’s scenario," Chatterjee said.

The bottomline

While these are some of the few reasons listed, there are many other factors which consumers should look at, while buying and renewing insurance policies. People increase their investment tools and investment amount with increase in wealth and responsibilities — similarly, they should look at increasing the insurance portfolio with time.

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(Edited by : Shoma Bhattacharjee)

First Published:May 24, 2023 5:19 PM IST