There is no certainty and an unfortunate event may completely change your life. You may have a home loan, education expenses of your children, and other liabilities over and above your regular monthly expenditure. Have you considered what may happen to your loved ones if you are suddenly no longer around to take care of these financial obligations? That’s why nominee for term insurance is a must.
The easiest and most effective way to protect your family against the financial insecurity is to avail of life insurance. You may choose traditional endowment or money back insurance plans; however, the premium on these is high.
A more affordable and cost-efficient choice is to invest in a term insurance policy. It is a pure life cover that pays the policy benefits to your beneficiaries in case something unfortunate happens to you.
The most important objective of a term insurance plan is to provide financial stability to your family in your absence. It pays the benefits to them if an untoward incident takes place during the policy duration.
How Nominee for Term Insurance can benefit your family?
In addition to the policy benefits, there are several other advantages available to your nominees under a term plan. Here are three such added benefits:
- Payout option
An interesting and beneficial feature of such plans is that you may choose the term life insurance payout options. This means the policy benefits may be provided to your nominees in the form of a lump sum. The money may be used for meeting immediate liabilities like repayment of outstanding loans.
Alternatively, you may choose a monthly payout option. Under this option, your nominees receive a pre-specified amount at regular intervals. This is beneficial in allowing your loved ones to meet their expenses. This is an excellent way to replace the loss of income if you are the only earning member of your family.
Moreover, it is also a recommended option in case your nominees are not financially sound and may have difficulty in managing the lump sum payout.
You may also choose a combination of the two options wherein some portion of the benefits is paid as a lump sum and the balance in periodic intervals.
- Premium waiver
Another huge advantage of term plans is the waiver of premium benefit. Under this feature, if you become incapacitated due to a critical illness, the balance premium for the remaining term is waived. Such a waiver does not result in the loss of the policy benefits.
This is a highly beneficial feature as it ensures your family members do not have to worry about financial distress while dealing with your illness during an emotionally difficult period.
- Life stage adjustment feature
To take advantage of lower premium and higher coverage, you may have purchased online term insurance while you were single and younger. The coverage may have been determined by your responsibilities at the time of purchase.
However, as you grow older, your responsibilities increase. This requires reassessing your current coverage and additional insurance requirements. Several insurers provide an additional feature to enhance your coverage at important times during your life such as marriage, childbirth, and buying a home. Additionally, insurers provide flexibility to enhance the cover based on your assessment of life stage.
You may choose from different term plans offered by various insurers. In addition to the term insurance maturity benefits, it is recommended you check the additional advantages that maximize the financial stability of your loved ones in your absence.