Due to growing uncertainties in life, it is in the best interest of families to have life cover. It allows them to be financially stable and handle the loss of a loved one. As a result, people are becoming increasingly aware of the importance of having a life insurance cover. To meet this growing demand for life insurance, insurance providers have developed various types of insurance plans that cater to varying needs.
This is why it might be challenging to select the right plan suited for you in such a complex marketplace. The best method to analyze an insurance plan to judge if it suits your needs is by using an insurance calculator.
When you choose a term plan, you take into account aspects like income, expenses, liabilities, assets and financial goals. Nowadays, you can easily deduce the monthly, quarterly, half-yearly or annual premium amount. Using a life insurance calculator also helps to plan out exactly how to achieve your life goals.
However, life goals can change and financial needs tend to increase with different stages in life. The best method of tackling these changing dynamics is by opting for a term insurance plan with increasing cover.
The sum assured in an increasing term insurance plan grows by a set amount each year to adjust according to your needs. Unlike a regular term plan, it provides the option of increasing the sum assured during the policy tenure. However, it is important to note that in an increasing term plan, premiums may change or remain constant throughout the policy tenure.
Benefits of Term Plan with Increasing Cover
Let’s look at some of the key benefits of a term plan with an increasing cover that make it an incredibly lucrative option:
More Backup for the Family
Financial stability is the main reason why people turn to insurance policies. Generally, people analyze their financial plan and opt for an insurance calculator before selecting a plan that is right for them. However, in the event of your sudden death, the lives of your family members would change drastically. In that case, term life insurance would provide the entire sum assured at the time of death and play a key role in ensuring family members are prepared to manage expenses and without compromising their lifestyle, at least financially.
Opting for a term plan with increasing cover ensures that the sum assured will keep increasing throughout the policy term. Meanwhile, in the event of your demise, it will leave a considerably bigger financial reserve for your family.
Easy to Handle Financial Responsibilities
Each individual plans to achieve all their dreams at various stages of their life. For instance, if you plan to get married, the new goal might be to purchase a house or a car. Such purchases require a considerable amount of funds which may be gotten through auto loans, home loans or personal loans.
Usually, the proceeds from most types of life insurance can help to cover the loans along with interest. But in your absence, the loan amount will be burdened upon your family. However, by opting for a term plan with increasing cover, they can easily manage such situations.
Each individual is accustomed to a certain lifestyle. We strive hard to maintain the upkeep of this lifestyle for ourselves and the ones close to us. But in our absence, the maintenance of such a lifestyle can be a daunting task. Without an earner in the family, they might not be able to meet the rise in the cost of living as a result of inflation.
But, by choosing an increasing cover term plan, they can be assured that they will not have to face such a situation. They can continue to live their preferred lifestyle without any hindrances. However, it is beneficial to note down these expenses and use a life insurance premium calculator to select a suitable term plan.
For even more coverage, you can add riders to the term plan with an increasing cover but that will also lead to you paying an extra premium amount. You can even utilize a life insurance calculator to formulate the exact premium amount you will be required to pay.