Though term insurance is popular in the life insurance industry, did you know there are various types of term plans available as well? Before you proceed to get a plain insurance plan, try to get the maximum out of your money and look for what fits your circumstances the best. Here is a type of a term plan, an increasing term insurance policy and some of its benefits that you should know about.

Increasing Term Insurance Policy

An increasing term plan is an insurance policy with an increasing amount of sum assured or death benefit. The sum assured keeps growing and could have a cap as to how much it can increase. The frequency of the increasing sum assured depends on the insurer. Also, the premium of the plan could change or remain the same throughout the term. The benefit of having such a plan is that the rising sum assured accounts for inflation and the increase in the expenses of your family.

Benefits of Increasing Term Insurance Coverage

Increasing term insurance policy enables you to plan crucial developments in life like higher education, housing loan or a wedding when the sum assured of your plan is high. If something unfortunate took place, your family wouldn’t have to bear the financial brunt of the situation. With the lump sum payout of the sum assured, they would be able to pay off any debts that you may have. Also, the sum assured can be availed as a lump sum or as a regular payout depending on your insurer.

Adding Rider Benefits to Your Plan

A rider is an additional component that can be added to your term plan to maximise the coverage. You can add an insurance rider to cover unforeseen situations like an accident, major illness, etc. The riders give you benefits which are not covered by your life insurance policy. Here are some riders that can provide extra coverage:

1. Critical Illness Rider: Critical illness insurance rider safeguards you if you were to be diagnosed with a major illness. The benefit obtained from this rider is a lump sum payout which can be used to clear off the medical expenses as well as other indirect costs like loans and therapy. Kotak Life Insurance covers 37 major illnesses like cancer and brain tumor amongst others.
2. Permanent Disability Rider: A permanent disability rider secures you from accidents that can result in permanent disability. The benefit you get after adding this to your plan is a periodic payout received over a period of time that can be used to manage your medical expenses. It is advised to go through the terms and conditions and the exclusions of the riders before buying it.
3. Accidental Death Rider: Such a rider provides financial cushioning to your loved ones by giving out a lump sum payout in case of accidental death. This amount can be used to gain financial stability and also to make ends meet. Some life insurance policies also cover accidental death but having this rider increases the benefit and gives your loved ones extra aid.

Lashandra Holder