Buying an insurance plan is equally confusing as deciding on which house to buy. It all depends on your needs. But one type of insurance policy that is the most valuable is a term insurance policy.
So what exactly is a term insurance policy?
Term insurance plan meaning where benefits are only offered on the death of the insured. There are no maturity benefits to such insurance plans. It provides an insurance cover only for the predefined duration of your policy. Term plans are designed to provide a financial net to your family in case of an unfortunate demise of the policyholder.
Without any maturity benefits attached to them, they prove to be one of the cost-effective options that are available under the life insurance segment. Under term insurance, tax benefit for premiums paid can be availed under section 80C of the Income Tax Act.
There might be some cases where the coverage offered by a term plan might be limited. Did you know you could expand the scope of your term insurance plan? But how? Add-Ons! As the name suggests, add-ons are additional features that can be loaded onto the term insurance policy for an added premium.
Let us look at a few add-ons that make it worthwhile for the marginal increase in your premiums –
Accidental Disability Add-On
Accidents are unpredictable and are prone to happen at inopportune times. The costs of treatments in case of an accident are high. At times it can even lead to disabilities in extremely severe circumstances. In case of such a disability, the add-on will help cover the costs for your families. So instead of availing separate accidental insurance, you can load your existing term insurance plan with an accidental disability add-on. This makes it easy for your dependents to manage the treatment costs and support their livelihoods.
Critical Illness Add-On
This fast-paced life is leading to many lifestyle diseases. Some of them can be life-threatening too. Diseases like cancer, stroke, organ failure require immediate and prolonged hospitalisations. This can be expensive. In such times of distress, a critical illness add-on offers an upfront lump sum amount to the insured on the diagnosis of any of the critical illnesses as mentioned in the terms of the policy. This has an effect of easing the financial pressure that otherwise increases with the hospitalisation of dear ones. However, one needs to check while buying if any pre-existing medical conditions are covered under the add-on or not.
Waiver of Premium Add-On
Under a contract of term insurance, the policyholder pays the premiums for a fixed duration. But have you ever accounted for any misfortune that might make it unable for you to work and pay further premiums due to a disability or accident? There can be extreme hardships in paying for premiums at such times. A waiver of the premium add-on can come in handy. In such scenarios where you cannot work due to a disability or accident, all your future premiums are waived off. You are insured with your basic term plan until the date of its maturity. This feature is generally included in most term insurance plans but in case it is not, it is advisable to get it added for future uncertainties.
There are many different add-ons that you can buy. It depends on your need and how much coverage are you willing to assume for the added cost of premiums. Expensive as well as low cost add on plans are available. The pricing depends on your basic term insurance plan. So if you want comprehensive coverage for you and your family, you should consider some add-ons that are an absolute necessity for you.