10 Times the Annual Income is Your Life Insurance

Important Number – 10

It is very crucial to have a life insurance policy as it not only provides financial security but also higher returns. Sometime having an insurance policy will not be enough unless it is in a right proportion. They say you should have a life insurance worth of 10 times of your annual earning. So, if your annual earning is 5 lakh, you should have life insurance worth 50 lakh. However, your insurance needs may differ according to many factors, such as your age, liability and debt.

15 Percent Savings Rate

Important Number – 15

Saving money is a good habit but if you are finding it difficult, then start off with saving small amount. You need to apply the rule of 10 percent + 5 percent, where 10 percent is for retirement and 5 percent is short-term saving like a vacation or buying a car. This rule is also expressed as a ratio 85:15, which means out of entire annual income you should only 85 percent and save 15 percent for future needs.