Coprin Insurance

To many people, it seems as if car insurance is nothing but a waste of time. After all, how frequently do you actually use auto insurance? But I assure you that car insurance is something that you definitely do not want to go too long without. Due to the massive increase in population due to the availability of jobs in certain areas of the country, there are more people than ever who are fighting to carve out a space of their own in a new area or city. Naturally, whenever you have more people living in one area, you are going to be facing crowded roadways as well as more construction work on those already crowded roadways. The purpose of the construction is usually to expand the road to accommodate all of the people!

Auto insurance is very similar to having health insurance. We complain about the cost of having to pay it each month and yet, when we need it, it is there for us. And have you ever noticed how the pattern seems to go that as soon as you do not have auto insurance, that is the exact time frame in which you suddenly become involved in a car accident? Ironic, isn’t it? To help put things into perspective, when my relative (who normally had fantastic health and had never been to the doctor) suddenly came down with some sort of unexplainable illness that forced her to rush to the emergency room, once she was better, it wasn’t long at all before she received her first medical bill, and do you know how much it was for? The bill was for over $50,000. That didn’t even include the cost of the surgery and the specialists that followed after. When all was said and done, if she didn’t have health insurance coverage, she would have been looking at how to figure out how to pay off $100,000+.

The same kind of logic applies when speaking about car insurance coverage. Like health insurance companies, there are several different car insurance companies out there, which will allow you to shop around a bit for the best prices/deals on auto insurance. I strongly advise you to do so. In some cases, you can actually save yourself a bundle of money by choosing an auto insurance carrier that your significant other uses. In the mean time, keep your driving record clean because this is the first thing that most car insurance places will look at. Safe driving is something that you have the opportunity to practice every day, so why don’t you? You could wind up saving yourself a lot of money because of it.

If you are living with someone or are dating someone, you may also want to ask about any incentives that a particular car insurance company has as some car insurance companies will let you in on a cheaper auto insurance deal when you bundle your auto insurance with that of your significant other. Check it out sometime; it pays off in the long run!

Car insurance is required for every single car that is driven on the roads. The law of the land forbids you to drive any car without adequate insurance. It used to be an herculean task in some years back when you have to search through the pages of directories in order to get the list of insurance companies in your neighborhood. Today, the story is different. With the punching of few keys on your keyboard, you can get the best car insurance cover that you desire.

The insurance market is very competitive, therefore you should take full advantage of it and get the best quotes for your car coverage because comparison of quotes has proven to be the best way of getting affordable quotes. There are websites online that offer this service. They provide you with the names of all the insurance companies in your area as well as their individual quotes for comparison sakes. To further make this interesting, you can do this right from the comfort of your home. Be sure to get as many quotes as possible so that you would be able to get the best at an affordable rate.

There are some basic things or conditions to be met before one can possibly get cheap quotes and these include the following:

One of such things that attract lower quotes from insurance companies is loyalty. If you are a loyal customer, who has taken some other policies with same insurance company, you stand the chance of getting this form of discount. More-so, if anybody in your household, who wears the same surname as yours, takes any form of policy with the same firm, you also stand the chance of enjoying the is loyalty discount.

Another thing that could help you get cheaper car insurance quotes is having a clean driving history. If you are someone who earns traffic violation tickets on regular basis, then, you are not likely to get a good quote from any insurance company. Every of such tickets that you receive, is attached to your driving history for 3 years. Maintaining a good driving history will earn you lower quotes because careful drivers have lower chances of getting involved in accidents and that translates into more profit for the insurance company.

Always ensure that you use websites that are not affiliated to any insurance company when getting quotes for your car insurance policy because such sites are often not sincere with their insurance quotes. All they are interested in, is how to lure you into doing business with their own company.

Life Insurance is not a one-size-fits-all financial product.

Once you are done with answering whether to buy or not to buy life insurance, you’ll be confronted with another important question – how much insurance do you need?

Each family has different needs and different amount of assets. It needs no explanation that greater your financial needs, more insurance coverage you should opt for. But depending on the assets you own, the insurance coverage needed might be less. So, how much life insurance do you need? The answer isn’t really how much life insurance you need… it’s how much investment capital your family will need at the time of your death. The ideal amount of life insurance would allow beneficiaries and dependents to invest the insurance payout and then draw down the account over time to maintain the standard of living that they would have enjoyed had the income provider been alive and earning.

Insurance cover need is also dependent on your life cycle. Generally at the beginning of your career, you should have high insurance cover as there are not adequate investments to take care of exigencies. However, the insurance requirement keeps reducing over time as you keep on accumulating assets / investments.

You can use any of the three methods – ranging from rudimentary to detailed – to compute the appropriate level of life insurance coverage:

1. The Rule of Thumb OR Multiplier Approach

This is the most basic technique estimating your life insurance needs to be somewhere between 8 to 12 times of your annual salary. Remember, for calculations the net take-home income (after taxes) is considered as that is the real income you live on.

Though very simple to use, the approach lacks subjectivity and precision. If you think that multiplying annual income by 8, 10 or 12 gives you the right life insurance figure, think again! It is pure blind mathematics and fails to take into account your unique situation and financial obligations. What if you have outstanding home loan of 40 lakh and your thumb rule calculation says 60 lakhs insurance is enough? On the other hand if you apply the same logic on a person having a networth in excess of 100 crores, earning a couple of crores per year, he would require something around 15 to 20 crores of life insurance cover according to the thumb rule approach. But in reality, such a person may not require protective life insurance at all.

Hope you must be clear by now why using the multiplier approach is not a rational solution for computing life insurance needs. Life insurance is too serious a matter to be decided by a simple five second calculation. The 8x/10x/12x multiplier approach could be a good starting point for life insurance evaluation but it lacks the clarity and subjectivity needed for different clients with varying financial needs and net worth.

2. Human Life Value Approach

The human life value concept deals with human capital, or an individual’s income potential. This approach tries to attach a financial figure to your insurance needs based on your future income earning potential. It works on a premise that the financial loss to the family due to demise of an earning member is equal to the loss in future income the deceased would have earned. Under this approach the required life insurance cover amount is calculated as the present value of all future income that you expect to earn for your family’s benefit. It also includes other value you expect to contribute, less personal expenses, life insurance premiums and taxes till your planned retirement date.

The approach has its roots in ‘indemnity principle’ which is not applicable in case of life insurance policies. It doesn’t take into account the actual needs and future aspirations of the family. The approach suits those with regular and predictable income. But, calculating human life value of a business man or a self-employed individual with irregular income is difficult and error prone.

3. Needs Based Approach

This technique computes the life insurance requirements of an individual based on their actual future needs (or expenses) like children’s education, spouse retirement, emergency fund, debt / mortgage payoff etc. Under this approach, emphasis is on maintaining the current life style of the family into the foreseeable future. This approach ensures that all the current and future obligations of the family are sufficiently taken care of without any cutbacks.

This is the most detailed approach to life insurance as it requires some real thought to determine what expenses you need to cover and how much of those expenses are going to cost years (or decades) from now. You also need to evaluate the liquid assets you have in place. Once you have figured out the total future financial needs of your family in current value terms, you arrive at the final insurance figure by deducting the value of your current liquid assets.

The risk in this approach lies in underestimating the future expenses and hence under-insurance. Intensive nature of this approach makes it difficult to quickly arrive at a figure in a single sitting. Your family’s income requirements could be disparate and spread along different time periods making calculations difficult. This is where an experienced Certified Financial Planner can help you with the computations and identifying your family’s future needs.

Concluding Remark

Most of our clients were having insurance policies in the range of Rs 1 lakh to Rs 10 lakhs, a few had more than this but we are yet to come across any client being adequately insured. With this kind of life cover, the question one need to answer is: How long would that Rs 10 lakhs suffice? Remember that no survivor ever complains about receiving too much in life insurance benefits. You should try to strike a balance between what your family might need and what you can afford to buy.