If you look for a perfect car which suits all your needs and wishes, it may not be easy to find. You may, however, figure out all you need in it and go to a garage to customize the vehicle. Similarly, if you are looking for a perfect term insurance plan for your needs, you will find it really confusing to select one out of all the options.
But that is only until you realise exactly what you need and whether you can customize a term plan accordingly. So, finding the perfect term plan suitable for all your needs is going to be a little challenging.
So, if you are to meet the ultimate fate before you can look after your family’s financial needs your family will need:
- A large lump sum corpus to look after the current loans and future goals
- A reliable income stream to take care of the living cost
Before hunting for the perfect term plan, you should assess your family’s financial needs. Preparing a financial net is extremely important; however, if you do not know how much money will be adequate to pay for the expenses of your family, it will create troubles for them later.
Identify Your Financial Safety Needs Before Buying a Term Plan
To understand yours and your family’s financial safety needs you need to think of all the risks which can lead to financial hardships for your family. Few examples could be:
- Serious health emergency for any family member (more serious for primary breadwinner)
- Accidental hospitalization for any family member (more serious for primary breadwinner)
- Serious long-term disabilities for any family member (more serious for breadwinners)
- The early demise of primary breadwinner or spouse
- Property loss due to theft, accident, natural disaster, etc.
- Loss of employment, business for breadwinners
So, you can see that there are plenty of hazards which, if affect any member of the family, would lead to financial distress for the family. Various insurance plans provide the safety you will need from these hazards. There are term insurance plans that cover critical illnesses when they are diagnosed.
Can a term life insurance provide a financial net in your absence?
Only the best term insurance plans would fulfil all the needs you have listed for financial safety. Life insurance plans in India offer defined benefit covers for the following hazards only:
- Risk of death
- Contracting a dreaded disease like cancer, heart or renal failure, etc.
- Accidental disabilities
As you can see, the life cover will not protect you from the possibility of financial distress due to job loss. You need a different approach to look after that risk. However, you can consider online term plans like iSelect Star from Canara HSBC Oriental Bank of Commerce Life Insurance, to cover your family against other risks.
How can Canara HSBC Oriental Bank of Commerce Life Insurance help you?
Canara HSBC Oriental Bank of Commerce Life Insurance’s iSelect Smart360 Term Plan is one of the most flexible online term plans available. The plan allows you to not only cover all the possible hazards which may push your family towards financial distress but also have the option to cover other needs.
With the iSelect Smart360 Term Plan, you have:
- Terminal Health Cover by Default: A large term cover and cover against dreaded illnesses by default. So, you need not worry about adding a cover against terminal diseases for an additional premium.
- Accidental Death Benefit: Additional sum assured payable in a lump sum in case of death due to an accident
- Premium Waiver Option: Premium for continuing life cover is waived off in case of permanent severe disability due to an accident
- Accidental Disability Benefit: You can also add a benefit amount payable in case of such disability
- Child Support Benefit: Additional benefit amount option for the benefit of the child, payable in a lump sum
Thus, you can add these benefits to cover the entire spectrum of financial safety needs for your family. Apart from these benefits, you can divide your life cum terminal illness benefit amount into:
- The amount payable as a lump sum
- The amount converted to a monthly income
Thus, you can not only fulfil the safety needs with the plan, but you can also help keep their life simpler.
iSelect Smart360 Term Plan offers to pay the death benefit to your family as a regular income payout. Choosing the regular payout option may result in a long-term reliable income that will help the family meet their living cost.
A growing regular income payout will account for the inflation in household expenses for your family and help them maintain their lifestyles. You have the option to grow the regular income pay-out at either 5% or 10% per annum simple interest.
For example, if you want your family to start receiving an income of Rs. 50,000 a month growing at 10% per annum, the next year your family will receive Rs. 55,000 a month and the next year Rs. 60,000. The income will keep increasing throughout the tenure of payment.
You can identify the areas where your family will need assistance in your absence. If you look closely, you can understand that there are three important reasons your family needs money: regular income for household expenses, investments for future goals, like, higher education and marriage for children, a retirement fund for the spouse and money to pay-off any debts. A term insurance plan that allows you to align your financial goals according to evolving needs of life is one of the best term plans that you can find.