Hello everyone and welcome to our new blog posts. In today’s blog we will discuss about Mortality Protection Gap. What is MPG? It is very important to know about MPG in today's time. The presence of a protection gap can threaten the ability of average families to maintain a decent living standard in the event of the unexpected vicissitudes of life, especially premature death.
Many of us think that there is no need to evaluate the insurance cover we have taken but it’s completely wrong. While our economic condition, health condition and other social economic functions have been totally changed during current time, even our liabilities and responsibilities have changed. That is why we need to re-evaluate our insurance cover.
Initially we must know what Mortality Protection Gap is. MPG means how much insurance cover is less as per your labilities. Now how will this be decided? For that, first we have to decide that what should be the protection of a person. It should be such that one’s income is replaced as well as the liabilities or loans on him should be completed.
Now it comes that how many resources are available with that person.
This means where will the money come from: -
1. First from his savings
2. From his non-primary property where he is not living
3. From his current Life Insurance Policy
4. From his other assets like Mutual Fund, SIP and so on...
In simple words, a mortality protection gap is the difference between the amount of life insurance people carry and the amount they need to sustain surviving for loved ones. It is as same as the way that we carry an umbrella which has so many holes that we are unable to completely cover ourselves from the rain. So let's re-evaluate our insurance cover and get the MPG down to zero.Life insurance provides a quicker and more efficient way for policyholders to close their protection gaps because it costs much less when it is bought at an early age. Hence, policyholders who act early, and who regularly review their insurance portfolios against their MPG and financial resources, can achieve better protection for themselves and their families. So we advise all the investor to evaluate their investment portfolio once and find their Mortality Protection Gap.