Any person who has attained majority and is eligible to enter into a valid contract can insure themselves and those in whom they have insurable interest.

Policies can also be taken, subject to certain conditions, on the life of one"s spouse or children. While underwriting proposals, the insurance company considers certain factors, such as the policyholder"s state of health, the proposer"s income, and other relevant factors.

There are many advantages of buying an insurance policy as early as possible:

1. The consideration for an insurance policy or the premium is significantly lower at younger ages (the reason for that is as you grow older, the mortality risk is greater, and hence, insurance companies would charge a higher premium to cover that risk). By buying a policy at an early age, you would be able to protect your dependents against an unforeseen event like death at a much lower overall cost.
2. As you grow older, you will likely suffer from health problems, and obtaining insurance could become difficult at that stage, even if you want to.
3. If you are buying insurance with a view to create a large sum of money at a pre-determined age to meet certain planned expenses like your childrens education or for your post-retirement expenses, then saving early on in your life is highly beneficial.

If you start saving late, you must keep much more or for longer durations to get the same amount of money.

The need for life insurance is based on various factors, including your current lifestyle, expected outflows in future, your present age and your family size. The first step should be to estimate how much financial support your dependents would need to continue to enjoy the same lifestyle as they enjoy today if you are not around to provide that support. In estimating this support, you should consider all regular monthly expenses, including food, rentals, conveyance, school fees, medical expenses, any debts to be repaid, etc., and also estimated ones like children's education and marriage and your expected needs after retirement. Always provide for unforeseen contingencies that your dependents might need during the period of adjustment. Based on this analysis and the expected returns on the investments in future, you can work out a sum of money that would help your dependents achieve financial independence even if you are not around to support them. While every individual's situation would be different and should be evaluated separately, one rule of thumb is to buy a cover for an amount equal to 6-10 times your annual income. The need for insurance is not static and will change as your life stage changes, so you must re-work the requirement periodically and review the coverage available occasionally. It is advisable to speak to a trained financial consultant/insurance advisor to determine the extent of coverage that you require.

Your need for protection is not fixed as life progresses; new developments happen, and these developments impact the extent to which you need protection. Hence, the requirement for protection should be reviewed periodically, and if there is a shortfall, it should be covered as soon as possible by buying additional insurance cover. For illustration, some of the events in your life that are likely to have an impact on the levels of protection that you need are:

• You or your children are getting married.
• You have become or are becoming a parent
• Your parents or spouse have retired/are retiring and are / will be financially dependent on you.
• The health of your dependents or your health has taken a downturn.
• You have acquired large capital assets like a new home or a car.
• Your children are about to enter school or college.
• You or your spouse has a large salary raise, or the family income levels have significantly increased.

You should consult your agent/ financial advisor if any events like those mentioned above have happened to evaluate if your need for protection has changed.

Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against.

• The contract is valid for payment of the insured amount during:
• The date of maturity or
• Specified dates at periodic intervals or
• Unfortunate death if it occurs earlier

Among other things, the contract also provides for the payment of premiums periodically to the company by the policyholder. Life insurance is universally acknowledged as an institution which eliminates risk, substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of the breadwinner's death. Life insurance is concerned with two hazards that stand across the life path of every person:

• That of dying prematurely leaves a dependent family to fend for it
• That of living till old age without visible means of support

Your need for protection and planned savings at a point in time is the determining factor when you consider the insurance options. Our salesperson will assist you in making the right choice. However, while your advisor will recommend a life insurance policy that they think will meet your needs, you need to carefully examine the recommendations to ensure that your financial goals and protection requirements are indeed met. In India, the IRDAI has made it mandatory for insurance companies to provide each of the customers with an "illustration" that provides details of the premium outflows and the expected inflows for insurance products tailored to meet your specific requirements. Ask your advisor to explain the illustration to you and clear any doubts you have.