Financial planning is indeed a way to meet your long-term goals and obtain a peaceful life in the long journey. Therefore, we all work hard to fix our tomorrows and secure our loved ones. However, there is always a risk of unplanned eventualities and that’s where a Term Insurance policy comes into picture! A Term Insurance is a pure protection cover which is designed to secure the financial needs of your family in case you are gone. This type of insurance is of utmost importance, especially for the bread earner of the family. Read on to know more about term insurance.
What Does My Policy Cover?
- It provides life cover
Since term insurance plans are pure life covers, where one can gain no savings or profits. These plans are made to make life easy for the family of the policy holder. In case of any unfortunate contingency of the policyholder the nominee/beneficiary of the policy will get the specified amount known as death benefit. The beneficiary can choose a lump sum amount or a combination of lump sum and monthly pay out as per requirement. The term life insurance plans are the most affordable ones, therefore an individual can always opt for a larger life insurance cover for low premium payable. Therefore, these policies are not only for the breadwinners of the family, but normal individuals can also opt for them.
- Accidental Death Rider
The accidental death cover is an optional benefit rider that is provided to the nominee of the policy in case the insured passed away due to an accident. This cover offers additional sum assured and the percentage of this is calculated on basis of your sum assured. The policy holder can opt for this coverage while buying his principal policy. However, one good thing about this rider is that, the premium payable for this type of coverage remains fixed for the entire policy term.
Example: If you opt for a term insurance cover of INR 50 lakh and an accidental cover of INR 10 lakh. The reason for death if happens to be an accident, the nominee is ought to get the sum assured of INR 50 lakh plus INR 10 lakh (50 lakh+10 lakh)
- Total and Permanent Disability Rider
Under this type of a policy coverage, if the policy holder meets with an accident and is partially or permanently disabled, the benefit is paid to the insured. With the outcome of this rider the policy holder will be paid for next 5 to 10 years as accident-caused disability. A total and permanent disability cover is well accompanied with an accidental death cover.
- Critical Illness Rider
Critical illness like cancer, heart diseases, liver diseases etc. are on soar. It would be wise if the policy holder opts for a cover which cover these diseases. The policy holder will receive a lump sum on valid diagnosis of any critical illness pre-specified in the policy. Also with detection of any critical illness the policy can be continued or terminated as per the insurance policy terms and conditions. However it is vital to opt for a critical illness rider with a normal term insurance plans.
- Accelerated Death Benefit Rider
A terminal illness is a disease which cannot be cured and thus will result in the death of a person. With an accelerated death benefit rider, one can get a part of the sum assured in advance. This will help the family of the policy holder towards the treatment cost. The policy holder can also specify, how much amount would be payable in advance while buying the policy cover.
- Waiver of Premium Rider
In case if the policyholder is not able to pay future premiums due to disability, or due to loss of income the premiums will be waived off and the policy will also remain active. This type of riders can be especially opted by businessmen due to uncertainty of their job profile.
What makes Term Insurance that different?
Term Insurance is a pure death benefit plan. Since this plan does not involve investing in equities or other investments options, the premium you pay will only cover life of the insured. Low premium and high protective coverage are the main USP of term insurance policy. Another important aspect of a term insurance policy is that one can enjoy a frozen premium for the rest of policy tenure unless you opt to increase your sum assured coverage. Thus, a term insurance is a complete protection cover to financially secure your loved ones.
Thus, it is confirmed that Term Insurance is not a need, but a necessity in today’s life.
