We understand that one of your biggest priorities is to keep your family financially safe and secure, even when you are not around. In case of your absence, you would not want them to compromise on their sta
ndard of living or fall short of finances at life’s crucial stages.
While you can do very little to control the uncertainties of life, you can do a lot to give your loved ones a secure future by planning in the present. One of the best ways to do this is by obtaining a term life insurance plan.
What Does a Term Life Insurance Plan/Policy Mean?
Term life insurance is a type of insurance product that works as a financial cushion to protect your loved ones, in exchange for the payment of a premium. Premium is a sum that you have to pay at regular intervals to avail a term insurance policy.
The main aim of a term insurance is to provide your family members financial support in the event of your unfortunate demise. It does this by giving a monetary amount (called a life cover/sum assured) to them on the occurrence of death.
While buying term insurance, you are the policyholder/life insured and your family members (up to 2 of them) are the beneficiaries/nominees.
What Does Term Insurance Offer?
Apart from giving a guaranteed sum assured on the policyholder’s demise, term insurance offers a range of other benefits:
1. Option to choose sum assured payout
The policyholder can choose the way their beneficiary receives the sum assured. They can receive it as a one-time lump sum payment or in monthly instalments, depending on their financial needs.
2. Coverage for terminal illnesses
Some term insurance plans give the policyholder an option to avail of terminal illness protection. Under this, if the policyholder is diagnosed with a listed terminal ailment, the policy provides an earlier payout of a portion of the sum assured to treat the illness.
3. Return of premium and income tax benefits
In case an individual survives after the expiry of the policy term period, a few term insurance plans give back their policyholders a return on the premium paid. This premium is generally payable only after the insurance company deducts customary charges like extra premium for riders(#), taxes, loading for modal premium, etc.
Certain term plans offer tax exemption benefits under Section 80C and 10 (10) D of the Income Tax Act, 1961 that gives returns on the premium paid by the policyholder.
4. Options to add additional riders
Accidental Death Benefits: Term insurance plans also give an option to avail add-on riders(#) such as Accidental Death Benefits which gives additional monetary benefits, along with the base sum assured.
Permanent Disability Rider(#): A Permanent Disability Rider(#) will give a portion of the sum assured to the policyholder for a few years during the subsistence of the policy if the accident leads to permanent disability and subsequent loss of income.
Critical Illness Benefits: A Critical Illness Rider(#) will payout a lump sum predetermined amount on diagnosis of a listed critical ailment to help take care of the treatment expenses.
Other optional features: Term plans offer additional features that can help enhance the coverage offered. These optional features are over and above the riders(#) offered by the policy. One such optional feature is the Life Stage Benefit.
A Life Stage Benefit is an additional feature that helps you increase the coverage limit, later on as you progress in your life. Particularly useful for young investors, this feature will help you upgrade your term cover without the hassle of repeated documentation or paperwork.
All you have to do is select this feature at the time of purchasing your policy and you will have the flexibility to upgrade your sum assured by paying an additional premium, upon informing your insurer.
While all of the above benefits sound exciting, the Life Stage Benefit is one of the most commonly opted for. Let us dive deeper and examine why you should check about the Life Stage Benefits with your insurer while purchasing a term insurance plan.
Why Should You Consider Life Stage Benefit While Investing in a Term Insurance Plan?
Life stages, usually known as milestones, are predetermined by most insurance companies, including getting married, having kids, buying a house, or starting your own business.
When you opt for a Life Stage Benefit with your term life insurance plan, you can increase your sum assured to cover the rising financial requirements. A Life Stage Benefit gives you an additional sum assured amount during a particular stage of life.
For instance, Kabir bought a term life insurance plan of ₹50 lakh at the age of 24, when he was single. He made sure to buy a term plan with the ‘Life Stage Benefit’ feature. At the age of 28, he got married to Pooja. To account for an added dependent, Kabir increased his cover by 50% of the base sum assured to ₹75 lakh (50% of ₹50 lakhs + 50 lakhs) with the Life Stage Benefit feature.
After two years, they were blessed with a baby girl. Kabir further increased his coverage by 25% of the base sum assured to ₹87.5 lakhs (25% of ₹50 lakhs + ₹75 lakhs), taking into consideration the added costs of the child’s upbringing and education.
After 2 more years, Kabir availed a home loan of ₹50 lakhs and increased the term plan cover accordingly. Now his total term insurance coverage was approximately ₹1.37 crores. After Kabir’s demise, with the help of the term plan, his wife was able to shoulder their daughter’s education and marriage responsibilities.
Thus, the Life Stage Benefit helps you to increase your sum assured in tune with your rising financial responsibilities. Moreover, in the event of your unfortunate death, your beneficiaries receive the increased sum assured.
Other advantages of choosing the Life Stage Benefit option are - no additional paperwork, no repetition of medical tests for buying a new insurance policy, and there is only one single policy to manage.
The best part is that you can use the Life Stage Benefit any time during the subsistence of your policy, as long as you opt for the feature while purchasing the term insurance policy.
If you are not sure of which term insurance policy to buy, speak to our TATA AIA trusted advisor.
Stay Protected With Tata AIA Life Insurance Sampoorna Raksha Supreme Plan with Life Stage Benefit
Tata AIA’s term insurance plans are the ideal financial solution for every family, ensuring complete protection against life’s uncertainties.
Tata AIA Life Insurance Sampoorna Raksha Supreme (UIN: 110N160V02)
This plan provides:
The dual benefit of whole life protection up to 100 years of age and a Life Stage Benefit option without fresh medical underwriting (the process of evaluating the insurance company’s risk while insuring your home, car, health or life)
Choice of four death benefit options: Life option, Life Plus option, Life Income and Credit Protect
An Inbuilt Payout Accelerator Benefit that gives 50% of the sum assured upon diagnosis of the policyholder’s terminal illness
The option to add multiple riders(#) to further enhance coverage(#)
Flexibility to receive death benefit payout as a Lump sum or Income (up to 60 months) or both
Lower premium rates for female policyholders
Tax benefits on premium paid as per prevailing tax laws(@)
How to Choose Term Insurance?
To choose a term insurance plan that gives you the best benefits, here are a few simple guidelines you can follow:
Assess your present and future financial requirements, goals, and liabilities.
Factor in the rate of inflation and the rising cost of necessities.
Compare different term plans and life cover quotes.
Have a budget in mind for term insurance.
To conclude, term insurance takes care of every need of your loved ones in your absence. But, with a Life Stage Benefit, it can also take care of your own life’s needs during its most memorable stages.
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Disclaimer:
Insurance cover is available under the product.
The products are underwritten by Tata AIA Life Insurance Company Ltd.
The plans are not a guaranteed issuance plan and it will be subject to Company’s underwriting and acceptance.
For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.
This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
(#) Rider is not mandatory and is available for a nominal extra cost. Please contact Tata AIA Life's Insurance Advisor/branch for more details on benefits, premiums, and exclusions under the Rider, please contact Tata AIA Life's Insurance Advisor/ branch.
(@) Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.
Tata AIA Life Insurance Company Limited (IRDAI Regn. No.110 • CIN: U66010MH2000PLC128403). Registered & Corporate Office: 14th Floor, Tower A, Peninsula Business Park, Senapati Bapat Marg, Lower Parel, Mumbai - 400013. Trade logo displayed above belongs to Tata Sons Ltd and AIA Group Ltd. and is used by Tata AIA Life Insurance Company Ltd under a license. For any information including cancellation, claims and complaints, please contact our Insurance Advisor / Intermediary or visit Tata AIA Life’s nearest branch office or call 1-860-266-9966 (local charges apply) or write to us at customercare@tataaia.com. Visit us at: www.tataaia.com.
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