Life is full of uncertainties, so much so that it is difficult to predict what will happen in the next minute. Life catches up with you so fast that you don’t get time to think about it. The stakes are higher when you are the sole bread earner of the family, and you must protect your loved ones from life’s contingencies when you are not there to support them. Having a life insurance is a must especially if you run a small business.
According
to Census 2007-13, during the middle ages of 45-70, 37% of the people in
India lose their lives. Cardiovascular disease is the major primary cause of
early deaths taking a toll to 23.9% in male and 20% in female.
When such events occur, your family tend to go through the emotional trauma while some might go through financial instability as well. To avoid such cases, it becomes a necessity to opt term insurance for the safety of your family’s future.
If you’re wondering how then let us clear the
air for you, term insurance provides all the benefits of your choice at a meagre
amount.
Term insurance is a pure form of life
insurance, which provides a significantly large cover amount to the family
after your demise.
Term plans from reputable insurers such as
Max Life Insurance allow you to choose the duration and the benefit amount
under the policy, along with the option of receiving the amount, at the time of
purchase. While a lumpsum payout is preferred by many policyholders, you may
choose a monthly disbursal mode of the insurance benefit. Let us take an
overview of the two payout forms – lumpsum and monthly.
What is Lump Sum Payout?
By choosing the lump-sum payout, your
nominee will receive the entire sum assured (insurance benefit) at once, after
your demise within the policy tenure.
It is only wise to choose the lump-sum
payout if only you’re confident that your family will make sensible use of the
money. If any of your family members don’t have the financial knowledge, you
have the option to opt the plan for monthly payout.
What is Monthly Payout?
Monthly or Staggered payout will provide
your family with a fixed monthly income to fulfill their needs while providing
the option to choose additional benefits.
Factors to Consider While Choosing the Payout Options
If you’re the only bread-earner of the
family, term insurance becomes a must buy as it secures the future of your
family.
Choose the plan according to the benefits
you would like your family to receive. The sum assured under the term plan
should be high enough to cover your family’s lifestyle needs,
along with their future goals. Therefore, you need to assess your premium
payment capability, existing income, and future financial needs before choosing
the sum assured.
For example, if you have hefty loans to
repay, it is only wise to opt for a large sum assured that covers your
liability and select the lump sum payout. But if you have average to minimum
credits to pay, you can choose between different monthly payout options.
Before opting any term plan, read all the
terms and conditions; and compare
between different online term plans to choose the one that aligns with
your needs. The plan should be such that it does not come at the cost of your
present to fulfill your future requirements.
Different Payout Options Available Under Term Plans
Here are the payout options available under
term insurance plans, when you buy a policy online:
Sum assured in monthly income: The plan will act as an income replacement for your beneficiary/family. Under this plan, the total sum assured is divided equally into a monthly income.
Sum assured with increased monthly income: Apart from providing the monthly income, it also covers the benefits to overcome market inflation. With the general increase in prices, a fixed annual growth is provided by the insurer.
Lumpsum with monthly pay-out: Under this plan, your beneficiary will receive up to 100% of the total sum assured along with an additional monthly income payout. Choose it if you have intermediate loans to repay along with availing a fixed monthly income.
Lumpsum with an increased monthly pay-out: This plan combines the benefits of the methods listed above. Apart from receiving a fixed payout, your beneficiary will receive an increasing monthly income for a specific period.
Term insurance plans act as a safety net for your family in case any unfortunate event or a mishappening occurs. Make sure you choose the plan sensibly while analyzing the benefits. You can also buy the policy online for a smooth and quick process while availing discounts.
