Anand and Ranjan, both in their thirties, were best of friends, with closely bonded families. Once, while they were travelling to a homestay in Ooty, they met with an unfortunate accident, where their vehicle toppled and slid way off the road. Luckily, the wives and kids who were sitting in the back got away with minor bruises while Anand and Ranjan were severely injured. They were instantly rushed to a nearby hospital, where their wives filled out insurance forms. Unfortunately, Anand passed away a couple of hours later. Ranjan had to undergo multiple surgeries and corrective procedures.
Luckily, Anand’s insurance plan had benefits that ensured that his surviving family received income monthly rather than a lump sum amount, enabling them to efficiently invest and manage expenses. On the other hand, Ranjan’s insurance plan wisely consisted of disability cover add-on, which helped him avail the best of medical treatments and enabled him to spring back to health, moreover, saving the trouble of arranging the finances.
In the above example, if both individuals, had a plain vanilla cover, the scenario would have been a lot different, especially financially, considering the fact that plain vanilla insurance lacks many features. money
- Regular Income to Your Family
When one opts for a plain vanilla cover, the death benefit received upon his/her demise is in the form of a lump sum amount. However, it lacks the feature that a comprehensive term plan offers- lump sum payout + monthly income option.
Moreover, the option to receive monthly income allows the surviving members of the family to get a steady income flow and have time to look for alternate sources of income as well. Also, the monthly income option ensures that your loved ones keep up their current lifestyle, without the need to stress about bills and expenses every month.
- Useful Additional Risk Covers (or Riders)
The ability to add riders to your term plan means further securing the lives of your loved ones financially, as they get benefits over and above the stipulated benefits of the term plan in case of an untoward situation. For instance, adding critical illness rider to the existing term plan ensures that the policyholder receives a lump sum amount if diagnosed with a critical illness like cancer, heart diseases, kidney or liver failure etc., during the tenure of the term plan. In addition, accidental benefit rider provides financial support in terms of specific situations such as accidental death or disability, in contrast to plain vanilla term plan which lacks these features.
- Survival Benefit
The general principle behind the working of a term plan is- upon the demise of the life assured, his nominees receive the benefit amount in case he/she passes away during the policy term. However, no benefit is paid on survival. This point, i.e. ‘no survival benefit’, makes people wary of buying term insurance. But, this only holds true in case of a vanilla term plan. However, best term insurance plans come with the return of premium option, offering maturity value equal to the return of paid premiums if the person survives the policy term.
- Option to Increase Life Cover If Needed
You may have purchased a term plan when you were young, which is indeed a wise thing to do. But if your term plan is just a plain vanilla one, as opposed to a comprehensive plan, it will lack the option to increase your cover during important milestones of your life like your marriage, birth of your child, starting your own business etc.
Investing in comprehensive and best term insurance is always beneficial. It will provide the needful financial security to your loved ones after your demise. So, now when you are aware of the things that plain vanilla term insurance lacks, keep these in mind before opting for the same, and prudently buy the best term insurance for yourself. Put simply, a wise choice today can make a big difference tomorrow.