• Increasing liabilities:
  People today prefer to take loans to fulfill their needs, instead of waiting to save for the future. Hence, in your absence, your family needs to take care of this loan
• Nuclear family structure:
  Earlier, people could depend on their extended joint family system to take care of their near and dear ones in case of their absence. However, the share of families with more than 5 members has come down from 64% in 1990 to 56% in 2005 and is expected to decrease further.
• Increasing lifestyle diseases:
  People these days are prone to many diseases as a result of which the longevity of life is also reduced. Thus it gets important to take an appropriate risk cover and give your family a financially secure future.
• Loans & Liabilities :
  Insurance policy also helps to cover up one's loans and liabilities. The house one buys for our shelter, we would never want to let it go. Thus an insurance policy can help one to cover the loan liabilities.

This is determined by the concept of Human Life Value (HLV).

HLV is the monetary value of all the yet-to-be fulfilled needs of the dependents plus all the outstanding liabilities.

Human life value, commonly known as HLV, is an easy to use numeric way of arriving at an answer to the question above. An individual's HLV is typically expressed in terms of multiple of his or her annual income.

Some people think that they are adequately insured but in reality this is not the case.

As a thumb rule, 100 times of the monthly household expenditure should be an ideal risk cover for an individ

80-90% of the risk is covered through 100 times of the monthly household expenditure.

The objective of this is that people think that they are adequately insured but in reality they are not able to manage their household expenditure for even 2 years also.