Life Insurance came into existence to protect people from the three dreaded “Ds”—death, disability and disease. Term Insurance was conceived as a protection product that took care of “death” alone. However, term insurance products that are available now offer protection for all the three Ds to policyholders. Thanks to the evolution of the product, various customization options are now available with a term plan.
For covering death, term insurance plans provide a large sum assured at very nominal premiums. You can choose between having a fixed or increasing sum assured of, say, 5 per cent or 10 per cent of the original sum assured till it becomes double. Today’s term plans also allow you to increase your cover amount after life events such as marriage, birth of children and house purchase. This makes sure your sum assured is at par with your responsibilities.
Comprehensive Protection with Riders
Term Plans also allow you to opt for riders with the base plan, in order to have all-round protection. You can choose from the following riders according to the risks you need coverage for.
Accident Death Benefit: This rider pays an additional sum assured on the death of the insured due to an accident.
Total Permanent Disability Benefit: This rider pays an additional sum assured if the insured person becomes totally and permanently disabled due to an accident.
Waiver of Premium: This rider waives off future premiums payable in case of total and permanent disability/diagnosis of critical illness/death. In case the policyholder and insured are different, then, on the death of the policyholder, all future premiums are waived off and the policy continues for the insured person. If the policyholder and the insured are the same, then in case of diagnosis of critical illness or permanent disability, all future premiums are waived off.
Critical Illness: In case the insured person is diagnosed with any of the critical illnesses such as cancer, heart attack, stroke, kidney failure and paralysis, the rider sum assured is paid to the insured person.
Surgical Care: This rider pays the rider sum assured in case the insured person undergoes surgeries that are related directly to organs such as brain, heart, liver and lungs or other valid listed surgeries.
Hospital Care Benefit: In case the insured person gets hospitalized for a period of more than 24 hrs, this rider pays a daily cash benefit. The daily cash benefit is a fixed amount based on the rider sum assured. If a person gets admitted to the ICU unit, the amount payable doubles.
Each rider takes care of specific risks and pays accordingly. The payouts under a rider can either be an additional amount or an accelerated amount i.e. it is paid from the base sum assured. Riders enhance your protection quotient and take care of the remaining two Ds—Disability and Disease.
Policy and Premium Payment Term
Gone are the days when term plans were available for a short tenure. Now, as the life expectancy and working life of people have increased, the term plan is also keeping pace with it by providing higher policy terms. You can avail covers for terms of 5 to 57 years or till the age of 100. So, you can get coverage till the end of your life.
Having a higher policy term does not mean that you have to keep paying premiums until the end of the term. Insurance plans provide you with a smaller premium payment term—single or limited premium pay. You can fulfil your premium payment obligations during your earning years, or in one sweep if you make a windfall gain.
You can also choose the premium payment mode. It could be on a monthly, quarterly, half-yearly or yearly basis.
Term Insurance provides a huge life cover at the cheapest rates possible. The vast array of options now available with a term insurance plan ensure that you get to select the best possible cover that takes care of you and your loved ones in your absence.