The primary motive to buy a term insurance plan is to ensure that your family members maintain their lifestyle and fulfill all their aspirations even if you are no longer around. The high sum assured offered at pocket-friendly premiums is what makes term insurance one of the most popular life insurance products. You can utilize an online term insurance premium calculator to know the approximate cost that you need to bear for a considerably high sum assured. In case of an untoward incident, your nominee will receive the death benefit. Here are three features of a term plan that makes a nominee’s life simpler:
- Death benefit payouts through regular monthly income
When you buy an online term plan, you will be asked to ascertain how the insurer may disburse the death benefit to your nominee. You can opt for a one-time lump sum payment, regular income payout, or a combination of both.
For instance, if you have a sum assured of INR 50 lakh, you can decide how this money will be paid to the nominee if any unfortunate event occurs. Let us understand the payout options in a better way.
- INR 50 lakh as a one-time lump sum payment
- INR 25,000 every month for approximately 16.6. years.
- INR 25 lakh as a lump sum and INR 25,000 as a fixed monthly payment for the next 8.4 years
You can pick an option that suits your family’s financial needs and life goals. You can opt for a regular payment option if you feel that your family will be incapable of handling such a large sum efficiently. This option can ascertain that your family receives the monthly income even in your absence.
- Waiver of premium rider
You need to purchase the waiver of premium rider under your term plan at a supplementary cost. This rider is worth the amount, as it widens your policy’s scope. It comes in handy if you become permanently disabled or need to stay in the hospital for a long period for any treatment. In such situations, the insurer will waive off the premium for the remaining tenure.
For instance, Rajat invests in a term insurance plan with a life cover of INR 1 crore for a tenure of 20 years. His annual premium is around INR 12,000. If Rajat meets with an accident in which he loses his leg and becomes perpetually disabled after five years of purchasing the term plan, the insurer will bear the premium for the remaining 15 years. However, Rajat can still be insured until the term plan’s tenure ends without paying any premium.
So, this feature ensures that the policyholder does not feel the burden of paying the premium, especially when he or she is in distress.
- Adjustment of the sum assured according to the life’s milestones
Your financial responsibilities will not remain the same throughout the policy period. They will change over the years. If you have purchased a term plan before getting married, you had lesser obligations during that phase of life. However, when you get married and have children, your responsibilities increase. Therefore, you will have to raise the sum assured depending on your family’s needs. So, instead of buying a new policy altogether, you can increase the sum assured of your existing policy. Therefore, it becomes necessary to assess the important milestones of your life and increase the sum assured accordingly.
Now when you know what is term insurance plan and its features that can be helpful for your nominee, it is time to invest in a policy that meets the requirements of your loved ones. You can use a term insurance premium calculator to compare different policies and invest in a suitable one. As life is uncertain, it is advisable to buy a term plan online as early as possible.