You purchase an insurance policy to provide financial security to your family in your absence. This is just a simple understanding of the life insurance policy concept. But do you know that a life insurance policy can have a lot more benefits than just being a financial safety net? With a lot of players in the market offering plans with additional benefits and riders, you need to do your homework right before you invest in an insurance policy. This article is all about the right choice of insurance policy.
Benefits to Look for in the Life Insurance Policy
With several options available while purchasing an insurance policy, you tend to get confused. Since it is a matter of providing financial security to you and your family, look for the following benefits before investing in a life insurance policy. Life insurance coverage provides a huge chunk of money as a claim payout in case of the death of the policyholder during the policy term. Look for the following additional benefits of life insurance to make the investment worthwhile.
Enhancement in Life Cover
Financial responsibilities and needs increase at different life stages like marriage, childbirth, etc. Parallelly your life cover also has to increase if you have to ensure the financial security of your family at every stage. What is the use of a policy that does not have a provision for periodical enhancement in life cover? You cannot buy new insurance policies at every life stage. One of the major life insurance benefits that the insurance policy should have is a life-stage increment. Under this benefit, you can increase your life cover at crucial life stages in your life instead of buying a new policy at every stage. You can also opt for an increase in your life cover at 5% every year. This can continue till the sum assured doubles or you attain 60 years of age.
Cover Against Critical Illness and Disabilities
An accident or a critical illness can affect your regular income while mounting the expenses by way of expensive treatment costs. The availability of coverage against critical illness and disabilities is one of the benefits of life insurance that will take care of the following:
- Expenses incurred for hospitalisation and medical bills for recovery after an accident.
- Treatment costs for critical illnesses like cancer, renal failure, cardiovascular issues, etc.
- Some insurance companies provide a percentage of the sum assured for monthly expenses in case of total permanent disability if you opt for an accidental disability rider.
Premium waiver is one of the crucial benefits you should look for in an insurance policy. In the event of a permanent or temporary disability due to an accident or being diagnosed with life-threatening illnesses, your income may cease. This feature will help in the continuation of life coverage for the period without paying premiums and your family’s financial security will not be compromised.
The child support feature provides an added sum assured for the benefit of your child. This is distinct from the life cover or the added benefits you opt for. This avoids a separate investment to meet the goals set for your child. The payout will be made under a death or critical illness claim.
The untimely demise of a homemaker can mount your expenses. You will need additional support to look after your home and children which comes with a cost. The life coverage for a homemaker will cover the expenses that surface after she passes away.
Regular Monthly Pay-out
The insurance policy you buy should have this benefit to make life more comfortable for your loved ones. You may wonder what is the need for a monthly pay-out when your family receives a lump sum payout as a death claim. But digging out funds for monthly expenses from the lump sum can dwindle the funds and your family will be left with no funds to meet the larger financial goals.
With a monthly pay-out, the monthly household expenses can be taken care of while the lump sum amount can be invested wisely to meet future financial goals.
Whole Life Cover
An insurance policy without a return of the premium on maturity can be a disadvantage if you survive the policy term. If you have opted for a return of premium on maturity, it will serve as a retirement corpus.
Some insurance companies offer more. Along with the return of premium when you attain 60 years of age, they also provide life cover till 99 years of age. This benefit in your insurance policy will leave a legacy for your grandchildren while providing financial freedom post-retirement.
Buying a life insurance policy to secure our family financially is a smart move. Choosing the right insurance policy with all the above-mentioned life insurance benefits will provide a financial safety net for your family when you are no longer there. It will make your life financially comfortable under even the most difficult situations.