Who doesn’t like some additional benefits with the products they buy, be it your car insurance or an insurance policy? There’s also an inherent similarity between features added to your car and added to your term policy – both make your life easier.
But, before you decide to go only by the hunch, it’s better to know exactly how the benefits will add to your convenience. Let’s take a look at what these added benefits are and what they mean to you or the family you are trying to protect with the life insurance policy.
What Are Additional Benefits in Term Insurance?
Term insurance plans feature many benefits you can add to the base policy, to expand your coverage. Base term policy is simply a contract to provide your family with a large sum assured in the event of your untimely demise.
Additional benefits may add two different aspects to the base plan:
The first type of additional benefits adds to your sum assured, while the second type will only affect how the policy pays the selected S.A. to your nominees.
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Benefits Which Improve Coverage:
Benefits like accidental death or disability cover, critical illness covers add to your sum assured and make your term plan more useful.
Benefits to Make Life Easier
You have two benefits in this category as well:
Waiver of Premium: Whenever you have to file an accidental or critical illness claim, your income has been likely stopped or, at least, reduced. Thus, it doesn’t make sense for the insurer to ask additional premiums from you to continue your life cover.
Therefore, if you plan to pay regular premiums for a long period, you can opt for a premium waiver benefit. You will not have to pay any further premium for continuing the life cover in the event of accidental or critical illness claims.
Regular Income Pay-out:
Regular income is what sustains your household. Whenever a death claim pay-out happens, the family has lost the source of income. The only remedy is to reinvest the life insurance proceeds to build a new income stream.
Annuity plans from life insurers happen to be the best option to create a safe and long-term source of regular income. However, what if your family doesn’t have to bother about reinvestment? What if they can receive a regular monthly income as part of death claim itself?
Regular income pay-out option does exactly that for your family. You can set aside a part of the total sum assured under your term policy towards a regular income. The family will receive a monthly income based on this sum for a predefined tenure.
Which Additional Benefits Do You Need?
It should be easy for you to see that accidental, critical and regular income pay-out benefits are important. You may have a choice when it comes to premium waiver benefit, however.
Premium waiver works better for those who are paying premiums for more than one year at least. If you decide to go for single premium payment for your term policy, you will not need premium waiver anymore.
But if you want to pay the premiums over the course of a few years, the premium waiver is a useful option for you.
Does it make the Term Plan Expensive?
Adding more benefits and features does increase the cost, but the overall cost still remains nominal compared to the total benefit available. However, in the case of insurance, the increase in annual premiums is nominal compared to the life-long benefits for your family.