Buying an insurance policy should be the first step of the financial planning process, but most individuals, especially youngsters don’t give it the attention it deserves. They rely on their employees for health insurance coverage and don’t find it necessary to own a life cover. When buying a life cover, follow the 15x rule. That is, buy a policy that provides a cover amount equal to 15 times your annual income. So, a person who earns Rs 10 lakh annually should buy a policy that assures a sum of 1.5 crore.
This ensures that the insured dependents have as much as 10 years, to sustain themselves before establishing a new source of income.
