How Life Insurance Ensures Regular Family Income

2025-07-11

3925 Views

10 minutes read

Locate branch

Resume journey

Pay Premium

Live Life More Confidently

Get best insurance from our experts

Name is required Name should be Valid

Mobile Number is required Mobile Number should be Valid

Email is required Email should be Valid

DOB is required DOB should be Valid

Annual Income*

< 3 3-5 5-7 7-10 > 10

Annual Income is required

I agree that even if my contact number is registered with NDNC / NCPR, I would still want the Company to contact me on the given number and email id for the clarifications/product information sought by me and agree that I have read and understood the Privacy Policy and agree to abide by the same.

Please tick to proceed further.

Thank you for your interest in our product. Our financial expert will connect with you shortly to help you choose the best plan.

Key Takeaways

Term insurance can offer monthly income payouts in addition to or instead of a lump-sum amount.
Regular income helps families manage daily expenses and maintain their lifestyle after the loss of the primary breadwinner.
A large lump sum alone can be hard to manage and may lead to premature financial exhaustion.
Monthly payouts from term insurance are tax-free under Section 10(10D) of the Income Tax Act.
Some plans offer inflation-adjusted income growth to preserve purchasing power over time.

As the primary caretaker of the family’s income, you also bear the responsibility of ensuring income/continuity for your family. Expecting your dependents to take up the reins of your financial acumen right after your sudden demise could be unrealistic.

Even with good passive income, your dependents will need time and support to come to terms with the new reality. The usual misfortune families suffer after the sudden demise of the breadwinner is the magnitude of long-term financial decisions. Suddenly, they come face-to-face with the responsibilities you had so efficiently carried.

Term insurance plans generally offer the flexibility to choose the way you want the benefits to be paid out. One such option is a monthly income or a part lump-sum, part monthly income payout of benefits. Choosing a regular payout option will create a monthly income stream for your family.

As a wise caretaker, you would want your family’s regular income to be a safe stream. So, how do you ensure that the monthly income stream keeps on trickling?

How Regular Payout Option in a Term Plan will Benefit You?

Get Adequate Health Cover

Health insurance can support you financially in case of sudden hospitalisation. Adequate health cover means that the benefit amount of the cover is large enough to allow the best medical care for you and all your family members. Yet, at the same time, the cover should be:
• Affordable for you
• Should keep up with inflation
You will need two kinds of health covers for your family. One is the Mediclaim insurance, which takes care of hospital bills directly. The other health insurance protects you financially against dreaded diseases, which are unpredictable and can be financially devastating.

What If You Already Have Health Insurance?
If you already have health insurance, all you need to do is check the following:
• Is the coverage adequate?
• Does it cover your spouse and child?
• Do your parents have adequate health cover?

If your existing health cover is low, you should try and secure a higher sum insured under the plan. While you can increase the cover under Mediclaim insurance with critical health cover, you will need to buy another policy. You can also add new family members to your existing Mediclaim insurance plan.

The profession, employment or business is often the primary forte of one family member, also considered the primary breadwinner for the family. So, if you are the primary breadwinner for your family, how do you ensure that the family has a source of income even when you are not there?

Get the Best Term Insurance Plan for Your Needs

Full Name* Please enter correct name Please enter the Full name

Mobile Number* Please enter valid mobile number Please enter Mobile Number

Email* Please enter valid email Please enter Email

...Read more Consent is required

Buy a Term Life Insurance to Protect Your Loved Ones

One of the ways is buying a term insurance cover for the family. In case of your untimely death, your family can receive a large sum of money. They can use this money to generate a monthly income as well as to meet their future financial goals.

However, the two challenges of investing the money in a safe instrument and tax will remain. Also, your dependents must be prudent about dividing the large sum for income and future goals.

Buying Term Life Insurance with Regular Income Option

Term insurance with a regular income option means you can decide to pay the benefit amount to your family as a monthly income. This is opposed to the usual lump sum only payout from term insurance policies.

With this option, your family can receive two different pools of money:

Lump-sum amount to help pay off any debts and invest in the big future goals
Another part is converted to a monthly income for the remaining policy tenure

With this option, you can completely eliminate the need for your dependents to invest the insurance proceeds for household needs. Instead, they can focus on their future and living debt-free.

Did You Know?

Many term policies are also “convertible,” as they can be converted into a permanent life insurance policy.

Investopedia

Does a Term Plan Provide Inflation-Adjusted & Tax-Free Benefit at Maturity?

Life insurers are renowned for their long-term safe investment options. After the sovereign government, life insurance companies are the only asset managers promising a guaranteed return on a 20-year investment plan.

Also, since this income is a direct payout from a life insurance policy, it is not taxable under section 10(10D) of the Income Tax Act, 1961. You can choose to make this income grow over the years by a percentage of the initial payout.

This way, the income keeps growing for the family, and they can maintain their lifestyle in the long run.

For example, with the iSelect Smart360 Term Plan byCanara HSBC Life Insurance, you can choose a level family income or opt for a 5-10% growth that will be payable for 4 years.. So, if your family starts to receive an income of ₹ 50,000 per month, it will keep growing by ₹ 2500 - ₹ 5000 every year for 4 years.

Thus, if you are salaried or have a business, the simplest way to ensure the long-term safety of your income to your family is with a regular income option of term insurance.

Term Insurance - Top Selling Plans

Canara HSBC Life Insurance offers online term insurance plans to secure your family financially in your absence.

Family Shield: Enhanced Protection

iSelect Smart360 Term Plan

3 Plan options
Life cover till 99 years
Steady income benefit
Block your premium at inception

Start Young, Pay Less, Stay Secured

Young Term Plan

Life cover till 99 years
Coverage for spouse
Block your premium rate
Covers 40 critical illness

Family Shield: Enhanced Protection

Affordable prices
Multiple premium payment option
Get Tax benefits
Hassle-free purchase process

Conclusion

Choosing a term insurance plan with a regular income option ensures that your family receives a stable and tax-free income stream even in your absence. This approach reduces financial stress, eliminates the burden of investment decisions, and supports both daily needs and long-term planning with ease.

Glossary

Sum Assured: The guaranteed amount paid to the nominee in case of the policyholder’s demise.
Rider: An additional benefit that enhances a term insurance plan, like critical illness coverage.
Term Insurance: Term insurance is a type of life insurance that offers financial protection for a set period.
Mutual fund: A mutual fund is a pool of money that is invested in stocks, bonds, and other securities.
Financial Dependents: Family members who rely on the policyholder’s income for their financial well-being.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.