MortalityProtection Gap (MPG)
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.
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