How beneficial are Income Protection Plans in India?
Sanjeev is the breadwinner in his family. He has a beautiful wife and 2 angelic daughters for whose happiness and security he goes to great lengths. But, there are days and nights when a fear crosses his mind- the fear of his family being left without him.
What will happen to his wife?
His lovely daughters?
His family’s big- little dreams?
How will they provide for themselves and deal with his death?
Isn’t there anything he could do to ensure that in his unfornutate absense, their lives don’t undergo a financial upsurge too?
How can he ensure that the income flow does not stop and continues to support his family?
After one Sunday of frantic Google searches, he found the answer: Life Insurance Plans, or more specifically, Income Protection Plans. If you share the same fears as Sanjeev, then read below to know the solution that finally eased his concerns.
What are Income Protection Plans?
Regular Life Insurance Plans- whether Term Plans or Saving Plans, pay a lump sum (called the death benefit) to the beneficiaries when the policyholder/ person insured passes away.
There are 2 undesirable situations that can happen now- the amount might not be sufficient for the long-term in which case your plan for long-term security for your family will tank. And secondly, having received such a big amount, your beneficiaries i.e. your family might not know what to do with it.
Income Protection Plans like Aviva Income Suraksha come in to solve the problem.
With these plans, the pay-outs can be made monthly or at a duration that suits the nominees. This ensures a regular income stream and also wards off the possibility of the misuse of money. Some plans also offer a lump sum to take care of immediate expenses.
How long does the beneficiary get the regular income? That varies from plan to plan, so it is recommended to check the details of this with the insurance provider you choose to invest with.
Also, these plans take the occurrence of inflation into consideration. There are also plans in the market that increase percentage of payouts every year. This ensures that your family has a strong foundation to continue maintaining the lifestyle even after you aren’t around. If your partner is able to build a financial standing for your family, this supplemental income will help to pay off any outstanding loans or EMIs that might otherwise cripple the household finances.
Just like Sanjeev, you can now take a deep breath of relief. For now, you are here to look after and protect your family. But, even after you aren’t with them, you would have left them with a means to lead a good life. If this is not love, then what is?