<div><em>Most working couples do not feel the need of life insurance as they don’t find themselves financially dependent on each other. But is the approach right? <strong>Sunil Dhawan</strong> explains</em></div><div> </div><div>In today’s world, there are lot of working couple earning a decent living and largely independent of one another when it comes to finances. And one thing they want to stay away from is any kind of insurance. Most upwardly mobile professional working couples refrain from buying insurance citing reason that they both are earning and not dependent on each other. But does it work? Let’s see. </div><div> </div><div><strong>The need still exists:</strong> When both couples are working and there’s an eventuality with either of them, the surviving member may get burdened with all the liabilities and loss of a source of income. Irrespective of a dual income household, it is important for the couple to be adequately insured as both are contributing financially towards the household expenses. When working couples use their income jointly for the household requirements then a loss of any one member’s income could disrupt the plans. </div><div> </div><div><strong>How it helps: </strong>There could also be dependent parents at home requiring financial if not just moral support. The long-term goals of children would also require attention and ensured that they don’t get derailed. If there are home loans being serviced, the liability may get added. All this needs a protection plan in place to ensure that the entire burden does not come upon a single earning member. Further, for life to come into a certain rhythm (even financially) in the absence of the other member takes time, thereby the need to have life cover. </div><div> </div><div><strong>How much:</strong> The amount of protection when both spouses are earning would depend on their earnings. If both are working and are earning enough so that each individual salary is equal to about 75 percent of the living expenses then there is no need for life insurance as long as there are no loans outstanding. If loans are outstanding, adequate insurance cover must be taken to cover loan components. This cover should be taken equally for both to cover the entire loan amount. This is to make sure that in case of the demise of any one of the individuals the survivor should have no loans remaining. </div><div> </div><div><strong>What to do:</strong> Look closely at the investments earmarked for long term goals such as for children. See, who is funding them or its getting shared by both. Accordingly, plan for it. But, what in case the earnings vary a lot among both. In that case, member with higher income should buy insurance so that family can survive in spite of the higher income being no longer available. Ideally, it should be at least 10 times of annual income.</div><div> </div><div>Life is uncertain and protecting it financially even for working couples is best met through term insurance plan that are low-cost, high cover plans. Both members can buy protection covers preferably those plans that come with joint life option. </div><div> </div>
