Why go for an insurance update

Change in income level
If your pay cheque has gotten fatter this appraisal season, consider enhancing your insurance cover. Since there will be a rise in cash flow, you will need to boost the sumassured of your insurance policy according to your present networth. " The life insurance cover should be calculated according to the Human Life Value ( HLV). The thumb rule is to have a life cover which is seven to ten times your networth.

So, re- assess your HLV and avail of an additional cover accordingly," says Rego. Also, your insurance cover should change with your age, lifestyle and financial goals. On the other hand, if you loose a job or your business venture runs into losses, you may consider cutting down your insurance premium.

"If the cash flow decreases then you may have to individually assess the insurance plans and see if any of these provide flexibility of skipping premium payment. Unitlinked insurance policies generally offer this flexibility. You can also consider surrendering a policy and reduce the coverage to tackle the situation," says Rego. But be prepared to pay the surrender charges and get a lower return if you are giving up the policy before end of the lock- in period. So, use this as the last option.

Got married or divorced
Tying the knot? Check if your spouse has life cover. If your spouse is an earning member, you would have to calculate a combined human life value ( HLV), the expected life- time earnings of an individual, and change the life cover accordingly. " You can either avail of a joint- life cover or split the cover and buy individual policies in accordance with your earnings," advises Anil Rego, CEO, Right Horizons, a personal wealth management firm. " If your spouse isn't earning, the life cover should be doubled," says Rishi Mehra, co- founder, Bimadeals. com.

"In case you had a divorce and plan to remain single and have no dependents, you can decrease the cover. But if you have children or dependent parents, the cover should remain same," adds Mehra. Nomination is another important aspect to consider in both situations. " After marriage, you might want to make your spouse the nominee for your policies or change the nomination of your life insurance cover from your spouse's name to other family member after a divorce," says Rego.

Acquired valuables
Proud of your new home theatre? Make sure to get a cover for it as well. Do not forget to inform your insurer and include the newly purchased item to your home contents insurance. A regular home insurance policy provides limited cover for expensive items. If your requirements are more than these sub- limits, talk to your insurer and add a rider to provide extra cover. " Extensive home renovations will also require you to prepare an inventory and extend your home cover accordingly, says Harsh Roongta, CEO, Apnapaisa.com. Also, home insurance doesn't cover items such as fine arts and collectibles. Buy specific covers for them.