A term insurance plan is a simple product that offers a lump sum or staggered payment to the beneficiary, in exchange for monthly or annual premiums, when the policyholder dies.
A term insurance plan is a simple product that offers a lump sum or staggered payment to the beneficiary, in exchange for monthly or annual premiums, when the policyholder dies. The features of these plans vary from company to company. For instance, one of HDFC Life Insurance plans allows the policyholder to choose the rate of increase of income along with the period for which one wants to receive the income. However, experts suggest that before that, one should decide how one wants to receive one’s payments and choose between staggered and lump sum payments.
Aditya Birla Sun Life Insurance recently launched a monthly income plan, wherein the policyholder can select the sum assured and policy term themselves. This plan will provide regular monthly income until maturity to take care of one’s recurring needs. It comes with features such as in-built accidental death benefit, where in case of unfortunate death of the policyholder, the insurer will pay the base sum assured as a lump sum and starts paying the monthly income immediately.
This monthly income plan is a non-linked plan and provides a comprehensive saving solution to help people plan ahead of time for a financially secured future. After the premium payment is over, this plan offers a monthly income of 1 per cent of the sum assured up to the maturity date. Also, it has the option to defer an individual’s monthly income to maintain their standard of living and offering financial stability as required.
This income benefit comes with two options, such as level income benefit, and the increasing income benefit. Under the level income benefit, you can avail a fixed income benefit of 1 per cent of the sum assured per month. However, under the increasing income benefit, policyholders can avail a fixed income benefit of 1 per cent of the sum assured per month with an additional benefit of increasing the income by 5 per cent per annum after every 12 months. You can also choose to receive the income benefit annually instead of the monthly option. Says, Pankaj Razdan, MD & CEO, Aditya Birla Sun Life Insurance, “The deferment option in the plan lets policyholders plan their finances as per their life’s milestones, thereby providing the best for one’s family in the years to come. This product can be beneficial for those who want a regular monthly income post retirement, early retirement or as a source of second income for many.
This plan also comes with an in-built accidental death benefit where over and above the base sum assured, an additional sum assured will be paid in lump sum other than the monthly payouts, in case of death of the policyholder due to an accident. Hence, the beneficiary/nominee will receive the double sum assured in case of accidental death, along with the monthly income benefit.