Can Term Insurance Plans Be Purchased As A Gift?

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Can Term Insurance Plans Be Purchased As A Gift?

Term Insurance Quote
  • 15th Dec 2021
  • 263

Can Term Insurance Plans Be Purchased As A Gift?


Ever thought of gifting a term insurance plan to your family? Yes, this is a new gifting trend that is all about empowering loved ones with financial stability and security, especially considering the woes brought in by the current pandemic. Keep reading to know more. 

You have purchased loads of gifts for your family. Unfortunately, most of them have either been used and exhausted or maybe lying safely in closet drawers. Why not gift something that will secure the future of your family members? And considering the ‘new normal’, steered forcefully by the coronavirus, a new gifting idea is the need of the hour.

Gift Term Insurance Plan to Your Loved Ones

Gone are the days when we used to save for rainy days. With the world overcast with Corona clouds, savings must go for rejigging as a term insurance plan. The policyholder will be paying a reasonable premium for a certain sum assured that will go to his family - in case of his untimely demise. 

A gift of term insurance plan will come with multiple endowments benefits

  • Monetary Shield
  • One of the direct benefits of gifting a term plan is ensuring a fiscal shield for your family. In case of any unfortunate turn of events, their happiness will not be marred by loans, debts due to the absence of primary income. 

  • Regular Monthly Income or Lump Sum Benefit
  • The regular income of the family’s sole earner is the family’s scaffold. A term plan will diffuse the brunt of losing primary income, and there will be regular income for the decided period (under a recurring payout) or a lump sum of money. This will provide great cushioning to bear day-to-day expenses and to maintain the living standards as usual.

  • Add-on Riders

Most of the insurance term plans offer riders that cover the ccritical illnesses and disabilities of the policyholders. A small escalation in premium can protect from many critical diseases without denting the savings. The selected insurance providers are even covering covid fatalities in their term plan policies.

Choose the gift of an insurance term plan that has a well-thought cover amount. Here are few tips to help you decide on the right cover.

  • The cover amount of the term insurance plan should be nearly 15 to 20 times of policyholder’s current annual income
  • The projected coverage should be adequate to accommodate the financial goals of the family. The maintenance of loans, vehicles, education, and health would need ample finances.
  • Inflation usually goes unnoticed while deciding the term cover. What deems to be an impressive cover amount may appear insufficient after long years. So, don’t overlook inflationary trends
  • Use Human Life Value (HLV) calculators that help you identify the right amount after considering your income, inflation, future liabilities, financial goals, etc. 

Term Plan - A Perfect Gift for Your Family

Show your financial preparedness by gifting a term plan to your family. With so many benefits available why delay gifting a term insurance plan for whom you care. Buy a suitable term plan while you are young to avail lower premiums and higher coverage. Pray, this gift never gets used by your family. If a calamity strikes, this gift will prove out to be the saviour and provide a stable financial corpus.

- A Consumer Education Initiative series by Kotak Life

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