The main reason for buying term insurance is to make sure that your family does not have to struggle financially in the case of your sudden death. However, that is not where the scope of term insurance ends. In addition to the claim amount, these policies also have additional benefits. These benefits can make your experience of having term insurance better. Moreover, having these benefits only means that your family ends up in an advantageous situation.
Here are 3 benefits that you should absolutely have:
Regular income payout
As per the regular rules of online term insurance, the claim can be made in the case of the policyholder’s death within the policy period. More importantly, the claim amount is given in a single payment. At that point, the transaction between the insurance provider and the claimant is over. After that point how the money will be used and how long it will last for depends entirely on your family. Hence, there may be a scenario where the entire amount runs out before it should have. In this situation, you would want to have a regulated disbursal of the money.
The regular income payout benefit of term insurance allows you to select how the sum assured will be disbursed. You can select the regular lump sum payment, the monthly payment option, or a mix of both options. If you are the only bread winner of the family, it is better to go for the monthly payment option. This way, your family will still have the regular income for their living expenses.
Waiver of premium
Not only is the waiver of premium benefit one of the most beneficial add-on offered with online term insurance, but it is also one of the most sought after. As per this benefit, in case of a fixed list of situations, the premium of the term policy will be waived off. These situations include disability, prolonged hospitalization, incapacitation due to an accident or an illness.
For example, you take a term policy with INR 1 crore cover amount that spans up to 30 years for a premium of ₹12000 per year. After completing 10 years with the policy, you end up in an accident that leaves you permanently disabled.
In such a case, the total premium left after the payments you have made after 10 years will be waived off. At the same time, your policy will stay intact. This benefit eases the burden that you would have to go through of paying term insurance premiums while dealing with other important expenses.
Increasing cover
Term insurance being a product that can have tenure up to multiple decades, there is no way what your life may be like at the time your family might have to make a claim on the policy. For example, you may be taking a term policy when you are single and do not have many responsibilities. This could mean you may have taken a policy with a lower cover amount. However, later in life when you have dependents, they rely on you for their needs and your untimely death may cause a huge problem for them. With these newer responsibilities, the standard of living and the expenses for it will also increase. So, your family may need much more money than you originally buy the policy at.
Fortunately, you can go for an increasing term plan. This benefit allows you to raise the cover amount after each policy year by a certain percentage. This way as you go more years with the policy, the cover amount grows.
Term insurance is said to be one of the first investments that anyone should make in life. However, most individuals buy a regular policy with the base coverage. You can make more out of your purchase by selecting these three benefits.
