You must be well-versed with a term plan if you have bought an insurance policy or considered to get one. But did you know about increasing term insurance plans? Term policies also have several types of which this is one. Let’s see what an increasing term plan is, its benefits and riders.
Increasing Term Insurance Plans
An increasing term insurance plan is a policy where the amount of sum assured or the death benefit keeps increasing on a yearly basis depending on the insurer. In such a plan, the premium may or may not change. Such an insurance plan has numerous benefits as the sum assured keeps increasing and in turn, compensates for the increased expenses of your family as well as for inflation. Depending on the insurer, the sum assured can have a maximum limit as to how much it can increase.
Benefits of Increasing Term Plan
The most vital benefit of increasing term insurance plans is that you can plan certain important things like a wedding or higher education during a period when the sum assured is high. In case something were to happen to you, your loved ones would have financial aid to pay off any of your debts and also, take care of their needs. The increasing insurance policy enables your family to take the sum assured as a lump sum or opt for a regular payout depending on your insurer.
Additional Rider Benefits
A rider is an add-on that can be combined with your term plan to increase the coverage you get from a basic policy. Various insurance riders are available that help you cover unfortunate incidences that are not normally included in a life insurance plan. Here are some popular riders that can be added to your policy:
- Critical Illness Rider: By getting a critical illness insurance rider, you can secure yourself from major illnesses. A lump sum payout is given to you on the diagnosis of the illness which helps in paying off the expenses of the treatment as well as any indirect cost like rent. Kotak Life Insurance covers 37 major illnesses like cancer, paralysis of limbs, blindness, brain tumor, etc.
- Permanent Disability Rider: This insurance rider covers you in case of an accident causing permanent disability. The sum assured is paid over a period of time to take care of your expenses.
- Accidental Death Rider: In case of accidental death, this rider protects your loved ones by providing a lump sum amount. This lump sum enables them to become financially stable and eliminate the need for becoming dependent on someone else.
