What Is a Passive Income? Why Should You Use It to Buy a Term Plan?
Close
Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term Plan

Protect Your family’s financial future with Kotak e-Term Plan. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Kotak Health Shield

Insurance against medical expenses related to heart, brain, liver and Cancer. Know more

What Is a Passive Income? Why Should You Use It to Buy a Term Plan?

What Is a Passive Income? Why Should You Use It to Buy a Term Plan?
  • 26th Nov 2021 |
  • 587

It is the innate desire of every individual to have more than one source of income. It is vital to support the family’s financial goals and especially beneficial to families that are financially dependent on a single person. One of the best ways to generate an alternative income source for your family is passive income.

Before discussing why to use passive income to buy term insurance, let us first understand passive income.

What is passive income?

As the name suggests, a passive income is an alternative income or secondary income that you can generate without working hard for it. This means you may need not rely on your business or employment and still earn a regular income to meet your and your family’s everyday needs and future financial goals.

One of the most common ways to generate passive income is to invest in different income-generating assets like equity stocks, monthly pension plans, fixed income investments, etc. Many people believe that since they have a decent passive income, they need not save more money or buy term insurance.

Buying term insurance with passive income

You must know that the passive income or income from your investments can be highly volatile, and the income you get largely depends on the market condition and economic factors. This means that if the market is dipping, your income will also reduce, and you may have to be flexible with your budget.

One of the best ways to beat the uncertainty of passive income, give your family robust financial protection, and secure their future is to purchase a term life insurance policy. A term plan not only gives your family the financial cushion until the dependents become financially independent but also help you meet your long-term goals.

The sum assured amount of the term life insurance policy could help your family meet significant expenses later in life like children’s education, marriage, etc.

Another significant benefit of buying term insurance for your family is that they can use policy benefits to meet their regular expenses and even pay off the dues like a home loan (if any). This means your family need not dig into their savings or accumulated wealth from passive income. Your family can be financially independent even in your absence.

Additionally, the lump sum that your family receives from the term insurance company can be used for their future goals. Your family can invest it in fixed returns investments like fixed deposits so that your children can inherit the same in the future when they become an adult.

Considering the growing inflation, you can make the most out of your term insurance by periodically increasing the sum assured amount to keep with the increasing financial requirements at different life stages.

For example, if you purchased term insurance when you were married, you must have chosen a smaller sum assured. However, when you get married, you would have to bear additional responsibility for your spouse and children. This means you would need a higher sum assured to protect the financial needs of your spouse and children.

Final Word

Buying a term insurance policy is beneficial for all. It assures you that your family will never face any financial hassles.

Kotak e-Term Plan

Download Brochure

Features

  • Nominal Cost
  • Multiple Plan Options
  • Flexible Payout Options
  • Critical Illness Rider
  • Tax Savings
  • Long term Coverage

Ref. No. KLI/22-23/E-BB/492

T&C

Browse our library of resources

- A Consumer Education Initiative series by Kotak Life

Similar Articles

Term Plan with Spouse Cover

How to Surrender Term Life Insurance When You Have No Liabilities?

Understanding Term Insurance Riders

Why Buy Term Insurance Even at Rising Rates?

Term Insurance with Critical Illness

4 Things To Expect From Your Term Insurance Plan in India

3 Things to Consider When Buying Term Insurance, If You are Single

Should Youngsters, Working Couples Buy Term Insurance Plans?

What Should You opt for - Limited or Premium Pay?

9 Point Guide on how to File Income Tax Return Online

Top 3 Reasons Why You Should Buy A Term Plan Now

Term Vs. Whole Life Insurance: Which One You Should Buy in India?

भारत में गृहणियों के लिए टर्म इंश्योरेंस

4 Reasons Why You Need Critical Illness Cover

Is There Any Tax Benefit on Term Insurance?

Can Senior Citizens Avail Term Insurance?

Make Your Online Term Plan Your Family's Monthly Pay Cheque

Why Spending Time with Friends is Essential for Your Mental Health?

Know How to Invest at Every Age for Larger Returns

What is a Joint Term Insurance Plan? Key Benefits of Joint Term Plan

Is term Insurance Needed for People With No Dependents?

How To Calculate The Amount Of Term Life Insurance You Need?

Should you have more than one nominee in your term insurance?

Can You Increase Your Term Insurance Cover?

Can I Get Term Insurance on Behalf of My Spouse?

टर्म इंश्योरेंस क्या है? टर्म इंश्योरेंस का मतलब

Why You Must Include In Your Financial Planning?

Form 16, Form 16A, and Form 16B?

Why 1 Cr Term Plan Is Necessary For Family?

How To Choose the Right Sum Assured Under a Term Plan?

Key Differences Between Term Insurance, ULIPs, And Health Insurance

How To Change The Nominee in Term Insurance?

Ensure Protection Against Death, Disease & Disability With Life Insurance

Can I Buy Term Insurance for a COVID-19 Patient?

Insuring yourself against Ill Health with a Critical Illness Rider

Can A Housewife Buy a Term Insurance Plan - All You Need to Know

What Is the Correct Age to Buy Term Insurance?

Ideal Features of a Suitable Term Plan - Act Now for a Stress-free Future

What is a short term insurance policy?

Comparing Term Plans – What Should You Look Out For

What All Documents Required For Term Insurance In India?

8 Factors to consider before choosing a Critical Illness Insurance

What is Form 16, Form 16 part A, Form 16 part B, Information Required and FAQs

Insurance Policy for Housewife In India

Should you buy a Renewable Term Life Policy?

While Buying Term Insurance Compare Features, Not Just Premiums

What are the Tax Benefits of Sukanya Samriddhi Yojana (SSY)?

Cost of Term Insurance Likely to Increase Soon

Can Term Insurance Plans Be Purchased As A Gift?

Increasing Term Insurance and Riders

10-Year Term Life Insurance Policy - Explained in Detail

6 Reasons That Make Term Insurance a Must Buy

Insuring Against Accidents with an Accidental Death Insurance Rider

Does Your Term Insurance Plan Cover Death Due to COVID-19?

Online vs Offline Term Insurance: Which Is The Better Option To Buy

कोविड -19 बूस्टर खुराक के दुष्प्रभाव

5 Reasons to Buy Term Insurance When You are in Your 30s

Key IRDAI Regulations That Changed Face Of Term Insurance Industry In 2020

8 Types of Death not covered in Term Insurance Plan

What Types of Deaths Are Covered in a Term Insurance Plan?

Why is it important to buy term insurance plan?

Do You Need Term Insurance Cover After Retirement?

What is Insurance Premium - A Detailed Guide

Do I Need to Give a Medical Test for Term Insurance in India?

Is it a Good Time to Buy Term Insurance During the COVID-19 Pandemic?

Why does every working women need life insurance?

How Does A Term Life Insurance Work in India?

Buying A Term Insurance? Don't Ignore the Claims Settlement Ratio

Planning For Children's Future

Different Types of Protection Plans

Term Insurance Calculator - Everythng You Need To Know

Choosing Riders for Insurance Plans

Can I Make Changes to My Term Insurance Policy Post Purchase?

9 Tax Changes in Budget 2019 that may Impact Your Personal Financial Planning

What Happens if you Hide Facts in your Term Insurance?

Why Term Insurance Is Better Than ULIP?

Endowment Plans vs Term Plans: Understanding the difference

Gift Your Father A Term Insurance Plan This Father's Day

Term Insurance vs Life Insurance: Understand the Difference and Benefits

Term Plans are Definitely Cheaper than You Think!

Why Should You Buy Term Insurance in 2022?

Term Insurance: What Happens When You Don’t Pay Your Premiums?

Why Should You Add a Rider to a Term Insurance Plan?

Term Insurance Age Limit – Term Plan for All Age Groups

Everything About Claim Settlement Ratio for Term Insurance

Can Non-Resident Indians (NRIs) Buy Term Insurance In India?

6 Types of Death not covered in Term Insurance Plan

5 Term Insurance Benefits for Single Women

How to Compare Term Insurance Online

Is a Term Insurance Policy Portable?

Importance of Term Insurance at Every Stage of Your Life

Insuring Against Disability With Disability Insurance Rider

8 Things To Do After Buying Term Insurance

How to Identify Term Insurance According to Your Needs?

What Are Insurance Riders and How to Choose Them in a Term Plan?

Tips to Choose the Right Term Period for Term Insurance Plan

Steps on How to Buy Term Insurance Online

Make Your Online Term Plan Your Familys Monthly Payout

What Happens to Term Insurance Plan With No Beneficiary - Kotak Life

All About Term Insurance Inbuilt Coverage

Term Insurance: Smokers vs Non-Smokers

Calculating Term Insurance Premium

How do I Calculate My Term Insurance Premium

10 Ways to Get Your Kids Involved in Your Healthy Lifestyle

Which Death Type Does Your Term Plan Not Cover?

Difference Between Term Insurance and Endowment Plan

Do Beneficiaries Pay Taxes on Term Insurance?

How to Buy 1 Crore Life Insurance Policy Without Medical Test

Can I Extend the Tenure of My Term Insurance Plan?

Term Insurance Basics You Should Know

What is the Right Term Period For Term Insurance Policy? Here's How You Should Choose!

What is a term insurance plan with a return of premium, and how does it work?

What Should Be The Duration Of Your Term Plan in India?

Which Term Insurance to Choose: Lump Sum or Staggered Pay-out Plan?

What are the Documents Required for Term Insurance Plan?

Individual Life Insurance vs. Group Term Life Insurance

When is the Right Time to Buy Term Life Insurance Policy for Yourself?

Advantages & Disadvantages of Term Insurance in India

Difference between Section 80C and 80CCC of the Income Tax Act, 1961

Insuring Protection Against Death With Death Insurance Rider

How Much Term Insurance Do I Need

Term Insurance: Most Common Term Insurance Myths Explained | Kotak Life

Eligibility Criteria for Buying Term Insurance in India

Should You Buy a Term Plan After 40?

9 Ways to Help Family Members in Financial Trouble

How To Choose the Right Term Insurance Plan?

Why Term Plan Should Be The First Step To Securing Your Future?

How to Ensure That Your Term Insurance Claims Are Never Rejected?

Is Group Term Life Insurance Provided By Employer Sufficient?

Why Should You Not Take A Term Plan Without Medical Test in India?

Planning For Son or Daughter's Wedding

5 Benefits of Early Retirement Planning

Different Types of Premiums in Term Insurance?

Does Term Insurance Cover Accidental Death?

Term Insurance With Riders In India

All about Online Income Tax Calculator

What Are the Best Term Insurance Plans for Planning Retirement?

Side Effects of Covid-19 Booster Doses

Why Term Insurance Is Important in times of COVID-19?

How Not To Get Your Term Insurance Claim Rejected

Are The Add-ons and Optional Features of Term Insurance Plans Actually Beneficial?

Reasons You Need Term Insurance Plan as a Self-Employed Person

Why Buying a Term Plan Is Smarter Than Traditional Life Insurance Products

5 Things To Consider While Buying Term Insurance Plan

All you need to Know about Term Insurance Plans for housewives

How Much Term Life Insurance Cover Do I Need?

Best Investment Plans for Children - Secure Your Child's Future

10 Ways to Mentally Refresh After a Stressful Day

Busting Myths and Facts About Term Insurance Policies

Is It Good To Buy A Term Insurance Plan In 2022?

9 Most Frequently Asked Questions on Term Insurance

How Does Term Life Insurance Work? Learn the Benefits

4 Methods to Calculate How Much Term Insurance You Need

Protection for your family

What is Term Insurance? Term Plan Meaning and Definition

Advantages of Buying Term Insurance in Your 50s

Term Insurance Plans and Policies for Smokers

Why Married People Should Buy Term Insurance Under MWP Act?

Why Should New Parents Buy Term Life Insurance?

Is Term Life Insurance Plan an Investment or Expense?

Why should single women purchase term life insurance?

Buying A Term Insurance Plan? Take These Factors into Account

Why Surrendering Your Term Plan Policy In The Final Phase Maybe A Bad Idea?

What Is a Renewable Term Insurance Policy?

Term Life Insurance Plan for Smokers vs Non-Smokers

जीवन बीमा पॉलिसी लेने की प्रक्रिया क्या है?

भारत में जीवन बीमा कितने प्रकार के होते हैं?

Is ₹1 Crore Term Insurance Good Enough Cover?

Why Premium Amount for Term Insurance is So Low?

Why Buy Term Insurance Plan With a High Cover?

Tax Benefits of Term Insurance in India

What is Critical Illness Policy?

8 Benefits of Term Insurance You Should Know

What are incremental term insurance plans?

Should You Have Multiple Term Life Insurance Policies?

How Much Cover Should I Take In A Term Plan?

Is Life Insurance Investment Worthy Enough

Zero Cost Term Insurance Plan: What is & Should you buy it?