Moreover, while COVID-19 may make one realize this, it is not the only reason to have one’s life covered. Life is uncertain as it is and one must have a comprehensive life cover in case of an unfortunate event of death.
Image Credit : Bajaj Allianz Life Insurance
When the COVID-19 crisis started, no one expected it to go on for one full year, and even beyond. Yet here we are, almost a year after the pandemic struck the world and the end is nowhere in sight. The deadly virus has infected over 81 million people, with over 1.77 million deaths1. The situation is no better in India, which saw a late surge in the number of infections. While it was better placed in the initial few months of the global pandemic, it is now the second-most infected nation, second only to the US. The number of infected people is now close to 10 million in India and almost 1.5 lakh people have already died in the country due to the deadly virus2.
Term life insurance to protect against uncertainties
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In such circumstances, amid all this uncertainty about one’s survival, all precautions need to be taken to ensure safety and security of our loved ones and ourselves. While everyone is doing their bit by wearing masks, washing hands frequently and maintaining social distancing, there is still an off chance that one may get infected despite these precautions. And, worse yet, what happens to their family if they are not able to overcome the virus. Having a term insurance policy becomes crucial in such circumstances to protect the financial future of your loved ones, especially if they are financially dependent on you.
Moreover, while COVID-19 may make one realize this, it is not the only reason to have one’s life covered. Life is uncertain as it is and one must have a comprehensive life cover in case of an unfortunate event of death. By opting for the right kind of term life cover, you can ensure that in case of any such eventuality, your loved ones can continue to live their lives with the same comforts, and can achieve the same goals that they had set for themselves even in your absence. The benefits paid by the insurance company, towards the chosen policy, would take care of the financial needs that you would have otherwise.
Lump sum vs monthly payout
When you buy term insurance, depending on the product features, the policyholder has the option to choose how the nominee would receive the sum assured -- also known as the death benefit. You could either choose a lump sum payment, or in the form of monthly payouts.
The idea of lump sum payment is quite simple. As the name suggests, the dependents of the deceased would get the entire sum assured as a one-time payment if the policyholder dies within the policy term. They can then decide how to use that money.
On the other hand, in case of monthly payout option, the beneficiary of the policy receives the sum assured in monthly instalments, which may run for a period of 10 years, depending on the policy terms and conditions, thereby ensuring regular income for the family of the deceased.
Why you should consider monthly payout option
The biggest reason to opt for the monthly payout option under your term life insurance plan (wherever the product features permit), is if your family is not financially perceptive. In such a case, they may not be able to manage a large sum paid as lump sum payment. However, if they receive monthly payments, that could work out better for them as they would serve as income replacement. Given the fact, these monthly payments last for 10 years, depending on the policy terms and conditions, your family’s future would be sorted.
Even for families with good financial condition that allows various ways to customize payout options as per the needs. You can go with an option of “lump sum with monthly income” where your nominees receive the benefit partly as a lump sum and the rest in monthly instalments. You can also go with “lump sum with increasing monthly income” where the monthly payout gradually increases over time to help with rising inflation. One needs to take the decision as per their needs.
In these trying times, a term insurance is necessary. However, just getting one for the sake of it is not enough. One must analyse the needs of their family and their future requirements before choosing the right plan. In the end, it is all about securing the financial future of your family. It is not something to be taken lightly.
Source:
1 https://www.worldometers.info/coronavirus/
2 https://www.worldometers.info/coronavirus/country/india/
For more details on risk factors, terms and conditions please read sales brochure & policy document (available on www.bajajallianzlife. com) carefully before concluding a sale. Bajaj Allianz Life eTouch Online Term (UIN:116N140V03) is a non-linked, non-participating, pure term life insurance plan.
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