Do I need Life Insurance? how much?

Life Insurance is the way to protect your dependents of a financial loss in your absence. So if you have no dependents, do you need insurance?

Life insurance is to save your dependents from paying for your liabilities in your absence. So if you have no liabilities so you need insurance?

The answer to these questions is a 'No'. You only need life insurance if you have dependents or if you have any liabilities. Your dependents can be your parents, grand parents, children, grand children or anyone else if they are dependent on your income for their expenses.

Your life insurance cover should be an amount, when invested in the safest way should yield a return that can help your family to pay all of its expenses which you would have provided for. So your insurance should firstly cover the amount that gives your dependents their monthly income

Life insurance should also cover any liabilities on you. This will ensure that in case of any sudden incident happening to you, your liabilities can be paid off and your family will not have to face this burden in your absence .

So in short your insurance sum assured should cover the follows:-

1)A sum that provides for the household monthly expenses for life in present value terms, adjusted for inflation

2)It should cover all your liabilities

3)It should make up for the expenses needed to fulfill your future goals in it present value terms


So if you are a bachelor/spinster and your parents are not dependent on you financially. and you don't have any other dependents, nor do you have any liabilities, then you need no Life Insurance. In the same way if you are retired and have no liabilities, and no more goals ot be achieved for your dependents and your dependents are completely financial independent then you too need no insurance at all.