The primary objective of the term insurance plan is to provide an income option for the family in the unfortunate event of the death of the policyholder.
Every earning person saves to achieve certain goals and these can range from buying a house to sending children to foreign universities. But life is uncertain and if the earning member of the family is not there, all these goals can leave the family in a better position without a source of regular income. The primary objective of the term insurance plan is to provide an income option for the family in the unfortunate event of the death of the policyholder. This ensures that the basic needs of the family – bread, clothes and houses are met and they can live life with dignity.
Covid-19 pandemic is a wake-up call to ensure the financial security of your family. No product or service can replace a person’s life.
The most economical product to provide financial security
However, term insurance plans can ensure that the family has financial resources so that they can continue their life and financial savings plans. The term plan is designed to be paid on the death of the policyholder. It is the most economical product to provide financial security to the family.
People up to the age of 40 years should have a life cover of 20-30 times of their annual income. Life insurance cover is recommended for persons in the age group of 40-50 years with an income of 10-15 times per annum and for people above 50 years, it is recommended to take a cover of five times the annual income. It should continue with the life cover till the age of retirement. People should also assess responsibilities such as family lifestyle, children’s education and retired parents, as well as financial liabilities such as home or personal loans. Apart from this, they should also check whether the life cover amount is sufficient to cover all these in case of an unfortunate incident.
Benefit of both health and life insurance in many plans
Life insurance companies have designed innovative term insurance plans with in-built critical illness benefits that offer double benefits of health and life insurance. Critical Illness Benefits protects against some commonly known diseases such as heart attack, angioplasty, kidney failure, chronic lung and liver disease and other cancers including breast, ovarian and uterine/cervical cancer. In addition, many more serious illnesses are covered under benefits. Medical progress has enabled us to overcome these diseases, but it is at the expense of more.
If policyholders have a diagnosis of a critical illness covered under the plan, then a lump sum is paid, which gives them relief to get medical treatment as soon as possible. The payment of a claim for the critical illness does not mean that the policy is over. Life cover continues in this, but serious illness claims are reduced and paid.
(By: Amit Palta, Chief Distribution Officer, ICICI Prudential Life Insurance)
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