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Features
Ref. No. KLI/22-23/E-BB/492
A term life insurance plan is a cost-effective and efficient way to protect your family's financial future in case of your untimely demise. But do you know you can opt for a monthly income term insurance? This blog will answer all your questions regarding the term plan with monthly income.
While buying a term plan with monthly income, one of the most critical things you must keep in mind is your family’s financial security. And, although you must focus on securing their financial future, you also think about how they or the policy beneficiary will manage their expenses in your absence.
If the family member who receives the policy benefit is not financially savvy, it is best advised to opt for a term plan with a monthly payout. The monthly payout will not only ensure their financial security in your absence, but it will also act as a monthly pay cheque to them. Depending on the coverage amount you choose, the payout can last a long time and give your family a regular income.
When it comes to financial planning, having a robust life insurance policy is a crucial element. Life insurance provides financial protection to your loved ones in the event of your untimely demise, ensuring that they are financially secure even in your absence. Among the various types of life insurance policies available, a term plan with monthly income is gaining popularity as a smart choice for individuals seeking comprehensive coverage and regular income for their beneficiaries.
A term plan with monthly income, also known as a term insurance plan with income benefit or monthly income benefit, is a type of life insurance policy that offers a combination of life cover along with a regular monthly income to the nominee or beneficiary in case of the policyholder’s death. Unlike a traditional term insurance policy that pays out a lump sum amount as a death benefit, a term plan with monthly income provides a regular stream of income to the family, which can help meet their ongoing financial needs and maintain their lifestyle even in the absence of the policyholder.
Life is unpredictable, and protecting the financial well-being of your loved ones in the event of your untimely demise is crucial. One of the most effective ways to secure their future is by investing in a term plan with a monthly income. A term plan with monthly income is a type of life insurance policy that provides a regular monthly income to your family in case of your demise during the policy term.
The primary purpose of life insurance is to provide financial protection to your family in case of your demise. With a term plan that offers a monthly income, your family will receive a regular stream of income, which can help them meet their day-to-day expenses, pay bills, and maintain their lifestyle, even in your absence. This ensures that your family’s financial needs are taken care of and provides them with much-needed financial security during a difficult time.
A term plan with monthly income not only provides immediate financial assistance to your family in case of your death but also helps them achieve their long-term financial goals. The regular term insurance plan with monthly income can be utilized for important milestones such as children’s education, marriage, buying a home, or retirement planning. It ensures that your family’s financial goals are not compromised due to the loss of your income and helps them maintain their standard of living in the long run.
Over time, inflation reduces the purchasing power of money. A term insurance plan with monthly income takes into account the impact of inflation and provides an increasing monthly payout. This means that the monthly income your family receives will be adjusted to keep up with the rising cost of living, ensuring that the value of the money remains intact and your family’s financial needs are adequately met, even in the future.
A term plan with monthly income offers flexibility in payout options, allowing you to choose the payout duration and amount as per your family’s requirements. You can opt for a fixed monthly payout or choose an increasing payout option to account for inflation. Additionally, you can choose the payout duration, such as 5, 10, 15, or 20 years, depending on your family’s financial needs. This flexibility allows you to customize the policy as per your family’s unique needs and ensures that they receive the financial support they need when they need it the most.
Term plans with monthly income are typically more cost-effective compared to other life insurance policies, such as endowment or whole-life policies. Since they do not have any investment component, the premiums are usually lower, making it an affordable option for obtaining life insurance coverage. This allows you to allocate your financial resources to other investment avenues or financial goals while still ensuring that your family is financially protected.
Another significant advantage of investing in a term plan with monthly income is the tax benefits it offers. The premiums paid towards the term plan are eligible for tax deductions under Section 80C of the Income Tax Act, 1961, up to a certain limit. The payouts received by your family in case of your demise are also tax-free under Section 10(10D) of the Income Tax Act. This helps in reducing your overall tax liability and increases the effective returns on your investment.
In today’s fast-paced world, securing the financial future of your loved ones is a top priority. Unexpected events such as accidents, illnesses, or untimely death can leave your family vulnerable and financially burdened. This is where a term plan with a monthly income can be a smart choice. It provides a reliable source of income to your family, ensuring their financial well-being even in your absence.
A term plan with monthly income provides your family with a regular source of income to meet their day-to-day expenses, pay off debts, and maintain their lifestyle. The monthly income acts as a replacement for your lost income, providing financial stability to your family even when you are not around. This ensures that your family’s financial needs are taken care of, allowing them to maintain their standard of living without any disruptions.
Term plans with monthly income offer flexibility and customization options to suit your specific needs. You can choose the amount of monthly income you want to provide to your family, depending on their financial requirements. This allows you to tailor the policy to your family’s unique needs, ensuring that they receive adequate financial support. You can also choose the policy term and premium payment term that best align with your financial goals and budget.
Inflation is a persistent threat to our finances. The rising cost of living can erode the purchasing power of your family’s savings over time. A term plan with monthly income takes into account the impact of inflation by providing a regular stream of income that is adjusted for inflation. This ensures that your family’s monthly income keeps pace with the rising cost of living, providing them with the necessary financial protection against inflation.
If you have dependents such as elderly parents, young children, or a spouse who may not have the means to earn a livelihood, a term plan with monthly income can be a lifeline for them. It ensures that your dependents have a stable source of income to meet their financial needs, such as education expenses, medical bills, and household expenses. This protects them from financial hardships and provides them with the necessary support to maintain their quality of life.
In case of your untimely demise, any outstanding debts that you may have, such as home loans, car loans, or personal loans, may become a burden on your family. A term plan with monthly income can provide your family with a regular stream of income that can be used to pay off these debts, ensuring that your family is not burdened with any financial liabilities. This helps your family maintain a debt-free status and provides them with financial peace of mind.
The premium waiver is typically offered as a rider or an additional benefit that can be added to a life insurance policy for an additional cost. The policyholder pays an extra premium for this rider, which is added to the base premium of the policy. In case of the policyholder’s death, the insurance company waives the obligation to pay future premiums, and the policy continues in force as originally intended.
The premium waiver is usually triggered by the death of the policyholder, and it may also apply in case of total and permanent disability of the policyholder, depending on the terms and conditions of the policy. The policyholder’s death or disability must meet the criteria specified in the policy for the premium waiver to be activated.
By purchasing a term plan with a monthly payout option, you can be sure that your family gets a steady income even in your absence. This is the most convenient option for the dependents to meet their expenses without feeling the burden of a lump sum payout and not knowing how to manage the amount.
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
Features
Ref. No. KLI/22-23/E-BB/2435
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
