Term insurance in the time of COVID-19: Why it matters
New Delhi : It has, quite literally, taken the world by storm. The dreaded COVID-19 continues its relentless march all over the globe, and in India as of April 15, 2020, total positive cases of the virus crossed the 11,000 mark. Meanwhile, the Government has extended the country-wide lockdown to May 3, 2020.
The Government continues to work on a war footing to contain the virus’s outbreak. And while you may not be in the mood to shop for anything at the moment, this is a good time to make one of the most essential purchases of all: a term insurance.
Taking a term plan at this juncture is the single most proactive step towards finding a good financial solution for an uncertain time. They can be useful during the Coronavirus outbreak – read on to know how.
Term insurance plans: Now including COVID-19
Term plans are life insurance policies that insure your life for a fixed number of years. If you are absent when the policy is still in force, then the benefits of the policy are passed on to your family members. Specifically, the term insurance nominee gets the benefits of the plan.
The advantage of taking the term insurance policy is that it pays a handsome sum insured while having low premiums. At a time when finances are cut and dried and you don’t wish to spend too much on an expensive life plan, a term insurance policy is a good tool in your financial arsenal.
The good news is that the IRDAI has notified insurance providers in India to include COVID-19 in their existing term plans, and to treat death claims against it like other claims. This is a heartening measure, especially if you were considering buying the term plan or already have one. Insurers are directed to cover hospitalisation costs as well as quarantine costs.
Which plan is best: Look out for these factors
Not all term insurance plans are created alike. While most work with the basic premise of ‘Low premium, high payout’, there may not be many benefits ingrained in the policy. In fact, most people hesitate to buy term insurance because there is no maturity benefit in it. This means that you do not get any of the paid premiums back if you outlive the policy term.
However, the benefits of the best plans far outweigh these minor niggles. Look out for term insurance policies from top rated insurers that offer these benefits:
• Limited pay term life insurance
• Provides both you and your spouse with a life cover, such as a ‘Better Half Benefit Option’. Your spouse does not need to pay additional premiums and still enjoy the life coverage.
• Freedom to choose the premium payment term options. So you can choose between 5, 7, 10, 15 and 20 years. This is an excellent benefit when finances are constrained – for example, you can pay for 5 years from now, but get life coverage till you are 85 years of age.
• Waiver of premium rider
• Critical illness rider – this is most important to secure your loved ones in your absence if you succumb to a viral illness like COVID-19.
How your family can use term insurance coverage
The term insurance coverage is normally in the range of Rs 1 crore and above. This is a sizeable sum of money that can help your loved ones tide over the financial loss of your absence. Even without your income coming in regularly, they can continue with their daily lives. You can buy the online term insurance plan today from a reputed insurer, and have peace of mind knowing that your family is protected against:
• Costs of household maintenance
• Children’s education costs
• Children’s wedding expenses
• Spousal support
• Unpaid debts
• Emergency medical costs
• Future expensive purchases like a car, second house, etc.
Preparing your loved ones for the future
• You can buy the best term plans online while you are in isolation at home. Take care to research the plan features and benefits among comparable plans before you buy.
• Download the product brochure to know all the details about the plan, especially with regards to couple term insurance, possible premium payouts, premium wavier riders, claim process, etc.
• Do note that the term insurance nominee must necessarily be a family member, such as spouse, parent or child. You cannot nominate a friend or unrelated third party to get the benefits. When choosing a nominee, do ensure that the chosen person is able to use the term plan money judiciously for the future.
• Explain to the adults in the house – spouse, parents, children over the age of 18 years – your reasons for buying the term insurance policy in the backdrop of COVID-19. Also explain the claims process and how to file for the coverage amount in case you are absent in the future.
• You can buy the term insurance plan online and download the policy document (a physical copy will be sent to your residence) for your records. Keep these documents safely and ensure that at least one family member knows where the documents are kept so that claims can be filed in the right time frame.
Stay safe and healthy
The Government of India has enforced another 19 days lockdown in a bid to contain the fast spread of the COVID-19. We hope you and your loved ones follow this diktat in letter and spirit, and take good care of yourselves during this trying time.
Apart from practicing self-isolation, also do report any signs of the Coronavirus infection – fever, cough, breathlessness – to your doctor if you or a family member are suffering from the same.
