Investing in a term plan has become necessary for everyone, as the future has become uncertain. If you are skeptical about the term insurance plan meaning, then let us explain it to you in a better way.
Term insurance is a kind of life insurance policy that insures the policyholder’s life for a specific duration. One of the biggest advantages of investing in a term insurance policy is that it offers a high sum assured at a pocket-friendly premium. Besides this, the policyholder can reap the term insurance tax benefit.
While buying a term plan, you need to consider factors like the sum assured, tenure, and the premium. The primary purpose of investing in a term plan is to protect the financial future of your dependents. Therefore, you need to finalize the sum assured that is sufficient enough to help your family members meet all the household expenses and financial goals.
You cannot afford to make any error while computing this value, as your family’s monetary well-being may be in jeopardy. However, with time, your financial responsibility can increase or your family’s long-term financial objectives can change. For instance, purchasing a new house, funding your child’s higher education abroad, and achieving other life goals can hamper your sum assured calculation, especially, if you have purchased the term plan when you were young.
You need to align your term plan’s sum assured with the changing milestones of life. If you think that you can directly upgrade the life cover amount, then you are wrong. There is no provision of increasing the sum assured. However, if you invest in an online term plan and opt for the life stage benefit facility, you can raise the sum assured without undergoing any medical examinations or doing the tedious paperwork.
How does a life stage benefit feature work?
Life insurance companies have pre-defined the inclusions of life stages. So, you need to read the documents properly before opting for the life stage benefit feature. Insurers consider milestones like getting married, having a child, financing your child’s education, and taking a loan to purchase a new house as different phases of life. So, if you want to upgrade the sum assured under this benefit, then you will have to inform your insurer and pay the supplementary premium. Do note that the new sum assured will be reflected after the policy completes the current year.
Advantages of the life stage benefit feature
Here are some benefits of opting for this facility:
- No medical check-ups required
A big plus point of the life stage benefit feature is that you do not have to undergo any medical tests while upgrading your term plan’s sum assured. So, you need not worry about the significant rise in the premium even if you develop any medical condition.
- Limited documentation
In this feature, you do not have to go through the long-drawn process of documentation. You only have to submit the proof of your life stage. For instance, if you get married, you will be required to share your marriage certificate with the insurer.
- Benefits available under a single policy
With this facility, you can upgrade the life cover of your current term plan, which means that you do not have to face the hassle of managing multiple policies. Here, everything is available under your existing policy.
- No changes in the present policy
With this feature, the underwriting of your policy will remain the same even after the sum assured gets modified. However, your premium will rise.
Enjoy the term insurance tax benefits while securing your family’s economic future. Invest in a term plan now, but do not forget to select the life stage benefit feature, as you never know when you will need higher life cover due to an increase in responsibilities.