You work hard to provide a comfortable and secure life for your family. You want to ensure that they are well taken care of, even when you are not around. But life is unpredictable, and anything can happen to you at any time. How can you protect your family from the financial hardships that may arise in case of your death, critical illness, or accidental injury?
The answer is term insurance. Term insurance is a type of life insurance that extends an exorbitant sum assured at a low premium for a fixed period. It is a simple and affordable way to safeguard your family’s future, as it pays out a lump sum or an income to your nominees in case of any unfortunate event that affects your life.
In this piece, we will explore how term insurance payouts can secure your family’s financial stability in different scenarios. Read on to find out more.
1. In case of the policyholder’s death
If you are still wondering what is term plan, this benefit will help you understand the plan better. The most obvious benefit of term insurance is that it provides a financial cushion to your family in case of death. The sum assured that you choose while buying the policy will be paid to your nominees as a lump sum or an income, depending on the payout option that you select.
This payout will help your family meet their immediate and long-term expenses, such as household bills, education, loans, etc. It will also help them maintain their standard of living and achieve their financial goals without having to depend on anyone else.
For example, if you buy a term insurance plan with a sum assured of Rs. 1 crore and a policy term of 30 years and die after ten years, your family will receive Rs. 1 crore as a lump sum or an income, as per your choice. Your family can use this amount to pay off your debts, fund your children’s education, or invest in their future.
2. In case of the policyholder’s critical illness
Another benefit of term insurance is that it covers you against critical illnesses that can affect your health and income. Many term insurance plans offer a critical illness rider, which pays you a lump sum upon diagnosis of any life-threatening disease covered in the plan.
This amount can help you cover the medical costs and maintain your lifestyle without compromising on your savings or investments. It can also help you cope with the sentimental and psychological stress that comes with a critical illness.
For example, if you buy a term policy with a coverage of Rs. 1 crore and a policy term of 30 years, and you add a critical illness rider of Rs. 20 lakhs, and you are diagnosed with a heart attack after 15 years, you will receive Rs. 20 lakhs as a lump sum. You can use this amount to pay for your treatment, medicines, and other expenses.
3. In case of the policyholder’s accidental death
A third benefit of term insurance is that it offers additional protection to your family in case of your accidental death. Many term insurance plans provide an accidental death benefit rider, which pays your nominees an extra amount over and above the sum assured if you die due to an accident.
This amount can provide extra financial support to your family in case of an unforeseen tragedy. It can also help them cope with the emotional and psychological trauma that comes with losing a loved one in an accident.
For example, if you buy a term coverage with a sum assured of Rs. 1 crore and a policy term of 30 years, you add an accidental death benefit rider of Rs. 50 lakhs, and you die in a car crash after 20 years, your family will receive Rs. As per your choice, 1.5 crores as a lump sum or an income. Your family can use this amount to pay for your funeral, settle your liabilities, or secure their future.
If you are looking for a term insurance plan that suits your requirements and goals, you can look at out the various options available online. You can compare different plans’ features, benefits, and premiums and choose the best fit your budget and requirements. You can also customise your plan with various riders and payout options and buy it online in a few clicks.