Life is beautiful, but yes, *conditions apply*. Ifs and buts seem to be an integral part of our life. No one is ever sure of what is going to happen in their life next; dash that, we are in less sure as to what could happen in the next few moments. Untoward, unfortunate events such as accidents or mishaps can happen without you any forewarning. Now, if you are the sole bread-winner for your family, then imagine the economic hardships that will befall your spouse and child.
To prevent such financial hardships upon your family in your absence, it is recommended to purchase a term insurance plan. These are simplest forms of life insurance policies designed to offer sufficient amount of monetary reimbursement to the nominees of the insured, upon the death of the insured.
The monetary benefit received is one time, and it is adequate enough to meet the basic financial needs of your spouse, child, or dependent parents for a particular period of time.
However, with rising costs of education, inflation affecting the prices of essential items, increase in the cost of medical and hospitalization expenses, the financial reimbursement received will not be enough to replace the monthly stream of income required for sustenance.
For this purpose, you require something more than a regular term plan that offers sufficient periodic pay-outs that will help your family members meet the necessary monthly expense in your absence.
Understanding the changing lifestyle needs, life insurance companies have launched income replacement plans that offer such monthly pay outs to the successors of the insured. These plans offer the promised sum assured along with periodic pay-outs that act as a pension to the nominees of the insured.
Moreover, several types of savings plan exist that will offer regular pay-outs after the maturity date to the beneficiaries of the insured.
As the sum assured received through a term plan is fixed, financial advisors recommend insurance buyers to invest in alternate instruments such as savings plans, child plans, and other related investment instruments to keep the flow of income constant. These returns and pay-outs provide economic support, thereby helping your loved ones leave a life without financial struggle when you are not around. Be it your child’s education or emergency hospitalization, the income received through such products will be available to meet such expenses.
So why just stick with the limited financial compensation provided by term plan when several other products are now available in the market to help your loved ones maintain their current lifestyle even if, god forbid, you are not around them any more.