How Does Term Insurance Plans Work as a Family Protection Plan in Unexpected Crisis?

family protection plan

Currently, the entire world is coping with the most unexpected community health challenge of the century – Coronavirus pandemic along with other unexpected happenings. As India witnesses a drastic increase in the number of cases, more and more people are now viewing to invest in a family protection plan to protect the financial future of their loved ones at an affordable cost, something like a best term plan that saves the family not only due to the insurer’s death but also if the insurer falls prey to any unfortunate critical situation.

If you are one of those wondering if a life insurance plan can take care of your loved ones in the event of fatality even in cases like Covid-19 pandemic, you are at the right place. Almost all the different term insurance plans available in the market today have riders that covers unexpected crisis like terminal illness, disability due to accidents and even accidental deaths. Let’s have a look –

What is a Term Plan?

A Term Plan is a term insurance plan structured to safeguard your family’s financial future in your absence. With a coverage of 99 years and benefit to cover your spouse in the same plan, the policy provides considerable coverage (something like 5 crore) as well as flexibility of payout options. In addition, you can choose either to pay premiums for 10 years or pay premiums for the chosen coverage period.

How Does Term Insurance Plans Work for Family in Unexpected Health Crisis?

Every policy offers different riders –

Accidental death Benefit Rider

This rider covers accidental deaths. Here, the insured’ family is given both, the sum assured of the policy + the rider sum assured.

Accidental Disability Benefit Rider

If the insured suffers from either partial or permanent disablement due to an accident, the insured gets a percentage of the sum insured depending on the disability. Besides, the insured might be paid in weekly or monthly instalments and his/her future premiums might also be waived off.

Critical Illness Cover

If the insured is diagnosed with any critical illness (listed with the insurance company), he/she gets the rider sum insured in one lump sum during the first diagnosis.

Serious Illness Benefit Rider

Unlike critical illness rider, serious illness rider covers more illnesses. Here too, the insurance company gives the rider the sum insured during the first diagnosis of the illness so that the family can deal with the financial implications of the insured’s unexpected illness.

What is Not Covered in the Policy?

Suicide – If the policyholder’s death is due to ‘suicide’ within a year from the date of revival of the policy or from the date of commencement of risk, the Nominee of the policy will be entitled to at least 80% of the total Premiums paid under the policy till the date of death or the ‘Surrender Value’ available as on the date of death, whichever is higher, provided the policy is in Inforce Status.

Also Read: 7 Major Types of Death that are Not Covered in Term Insurance Plans

Who can buy this Family Protection plan?

If you are between the following age bands, you may buy this plan –

Minimum Entry Age -18 years

Maximum Entry Age – 65 years

Maximum Maturity Age – 75 years for Joint Life Cover option and 99 years for all other options

Are there any specific things that you need to know about Term Plan?

  1. There is no payable surrender benefit
  2. No policy loan is allowed
  3. GST is applicable
  4. This policy does not have any survival benefit

Overall Verdict:

Now that Term insurance covers a wide-ranging ‘term’ along with overheads while providing variety of riders at a minimal rate, this policy is indeed recommendable as your family protection plan – especially now that these plans even cover death due to Covid-19.

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