One of the most significant concerns we face as individuals is how to ensure that our family is financially secure when we are not around. Life insurance is an excellent way to provide financial security to our family, especially in case of an unexpected death.
While traditional life insurance provides a lump sum amount to the beneficiary, the monthly income plan in term insurance offers a more structured approach.
What is a monthly income plan in term insurance?
A monthly income plan in term insurance is a type of life insurance policy that provides a regular monthly income to the beneficiary in case of the policyholder's untimely demise. In this plan, a portion of the sum assured is paid as a lump sum to the beneficiary, usually 10-20% of the total sum assured.
The remaining balance of the sum assured is then paid out as monthly income to the beneficiary for a specific period. The aim of this plan is to provide financial stability to the beneficiary and help them manage their expenses efficiently.
How term insurance with monthly income plan works?
In a term insurance plan with a monthly income plan, the policyholder pays a premium to the insurance company. In case of the policyholder's death during the policy term, the beneficiary receives a lump sum amount, which is a percentage of the total sum assured.
The remaining balance is then paid out as a regular monthly income to the beneficiary for a specific period. The duration of the monthly payout is typically between 5-20 years, depending on the policy terms and conditions. This plan helps the beneficiary to manage their finances, take care of their daily expenses, and plan for their future needs.
When should you buy term insurance with income protection?
It is advisable to buy a term insurance plan with income protection when you are the sole employed person of the family, and your family members depend on your income for their daily expenses.
This plan ensures that your family can manage their finances efficiently in case of your unexpected death.
Can term insurance be paid monthly?
Yes, term insurance can be paid monthly. Most insurance companies offer flexible premium payment options, including monthly, quarterly, half-yearly, or yearly premiums.