Term insurance plans are one of the cheapest ways to purchase life insurance. The pure term insurance plans have a straightforward structure. If you die within the tenure of the policy, the beneficiary will receive the assured sum and if you survive the tenure, you will not get anything back.
This is where people got confused and don't prefer a term plan. Because, mostly they find it a loss in case of survival, without realizing the power of a term plan.
But, insurance companies are smart enough to target that category with different types of term plans. Yes, nowadays there are several types of term plans available E.g. term plan with return on premium, term plan with monthly income option, term plan with critical illness benefit, etc.
In this article, I will share a few of the most popular term insurance plans with monthly income options. As the name suggests, this policy will give you regular monthly income in case of death of the policyholder, rather pay the 100% sum assured value.
But, is it worth it when we compare a pure term plan vs term plan with monthly income option? Let's find out.
In a typical term plan, the beneficiary receives the 100% sum assured value as the policyholder dies. In that situation, for this kind of policy, they don't pay the 100% amount. Rather they will pay a percentage of the sum assured and the remaining amount in certain monthly installments for the next few years.
Most of these plans generally offer about 10% of the assured sum as a lump sum amount to the beneficiary when the policyholder dies within the tenure of the policy and divide the remaining 90% in monthly installments for a fixed number of years.
Moreover, there are also policies with increasing monthly income benefits where the monthly income is increased by a certain percentage to tackle inflation.
Well, if you know that after you, your family will not be able to manage the finances well or maybe not sure how to utilize the lump-sum amount then you can go for such policies.
This will give your family a lump sum amount on death and after that a monthly fixed amount for the next few years so that they can feel the financial security.
But if your partner is good at personal finance, then I think a pure term plan is far better. As if you calculate the net return on such policies compared to a pure term plan, term plans are the clear winner. You can simply get that lump sum amount and invest a portion in mutual funds to get better returns. At the same time, you also get rid of any dependency of getting money from insurance companies.
Again, it is your call to decide. But make sure you buy a term insurance policy at the end to secure your family's financial life in the future (in case of your unfortunate death).
If you are not sure whether your family can handle that money properly, then better you can start educating your family about the importance of financial planning. You can discuss your term insurance policy and how to plan with the money in case of your death.
If you think this is difficult, then I think you can consider this list to start your research on choosing the best term insurance policy with monthly income benefits. Write a comment below and share your feedback or experience if any.
This is where people got confused and don't prefer a term plan. Because, mostly they find it a loss in case of survival, without realizing the power of a term plan.
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| Best Term Plan With Monthly Income Option In India 2020 |
But, insurance companies are smart enough to target that category with different types of term plans. Yes, nowadays there are several types of term plans available E.g. term plan with return on premium, term plan with monthly income option, term plan with critical illness benefit, etc.
In this article, I will share a few of the most popular term insurance plans with monthly income options. As the name suggests, this policy will give you regular monthly income in case of death of the policyholder, rather pay the 100% sum assured value.
But, is it worth it when we compare a pure term plan vs term plan with monthly income option? Let's find out.
What is a Term Plan with Monthly Income?
In a typical term plan, the beneficiary receives the 100% sum assured value as the policyholder dies. In that situation, for this kind of policy, they don't pay the 100% amount. Rather they will pay a percentage of the sum assured and the remaining amount in certain monthly installments for the next few years.
Most of these plans generally offer about 10% of the assured sum as a lump sum amount to the beneficiary when the policyholder dies within the tenure of the policy and divide the remaining 90% in monthly installments for a fixed number of years.
Moreover, there are also policies with increasing monthly income benefits where the monthly income is increased by a certain percentage to tackle inflation.
Who Should Buy a Term Plan With Monthly Income Option?
Well, if you know that after you, your family will not be able to manage the finances well or maybe not sure how to utilize the lump-sum amount then you can go for such policies.
This will give your family a lump sum amount on death and after that a monthly fixed amount for the next few years so that they can feel the financial security.
But if your partner is good at personal finance, then I think a pure term plan is far better. As if you calculate the net return on such policies compared to a pure term plan, term plans are the clear winner. You can simply get that lump sum amount and invest a portion in mutual funds to get better returns. At the same time, you also get rid of any dependency of getting money from insurance companies.
Again, it is your call to decide. But make sure you buy a term insurance policy at the end to secure your family's financial life in the future (in case of your unfortunate death).
List of Top 6 Best Term Insurance Plan with Monthly Income option in India
Now that you know what term insurance with monthly income is, let us have a look at some of the best ones in this category.5. Future Generali Flexi Online Term Plan (Fixed Income Protection and Increasing Income Protection)
With Future Generali’s Online Term Plan, you can select a lump sum payment of the assured sum at the time of death or select the income protection or increasing income protection plan.- With the income protection plan, the nominee will receive a fixed payment on a monthly basis until the time the policyholder would have turned 60 years old.
- And if you go for the increasing income protection plan, the monthly payments will increase by 10% every year.
- In the case of Basic life cover + Fixed income protection, you can get the dual benefit of lump sum amount and free monthly income up to your age of 60 years or 10 years after death whichever is higher.
4. PNB MetLife Family Income Protector Plus
With this policy, you can receive the premiums back that you have paid for the policy if you survive until the end of the tenure. If you die, you can go for a lump sum payment of the assured sum or select from the available monthly income plans.- Get guaranteed monthly income up to 20 years for your family
- Receive 110% of your base premium paid back at the end of the policy term
- Flexible monthly income options of Rs.10,000, Rs.25,000, Rs.50,000, Rs.75,000 & Rs.100,000
- Provide tax savings at the time of purchase and when monthly income is paid to your family.
3. ICICI Pru iProtect Smart Life Cover Plan
Want to give your family a monthly income option of Rs 50,000 per month even after your death? Then you can check out the ICICI Pru iProtect smart term plan which comes with a monthly income option. Here are the key benefits of this term insurance policy.- As monthly income gives a psychological satisfaction, with this plan in case of death of the person insured, the nominee receives a monthly income of Rs 50,000 for 10 years.
- In case of permanent disability due to an accident, the policy continues with no further premiums to be paid.
- You can buy this plan online in just a few minutes and save huge on premium amount.
- Income to your family is tax-free and you get tax benefits on premium paid u/s 80C.
2. Max Life Term Plan Plus (Life Cover + Increasing Monthly Income)
This policy offers three different coverage options.- 100% payment of sum assured on the death of the policyholder
- 100% payment of the sum assured on the death of the policyholder along with monthly income for 10 years
- 100% payment of sum assured along with increasing monthly income which will increase by 10% every year for up to 10 years.
- Your family will get a total payout of 148% of the lump sum where the monthly income portion will be 0.4% of the lump sum payment for the next 10 years.
- One can opt for riders like critical illness, disability, etc.
- Pay premium up to 60 years and get the life cover up to 85 years.
- You can increase the life cover at different life stages like marriage, having a child or buying a home, etc.
- Max Life is one of the best life insurance companies in India with a claim settlement ratio of 97.81%.
1. HDFC Life Click 2 Protect 3D Plus
This is the #1 best term plan in India considering as aspects. They come up with 9 different types of riders with their pure term insurance policy which makes HDFC Life Click 2 Protect 3D Plus as the best term insurance policy.- The policy allows you to select between 100% payment of sum assured at the time of death or 10% at the time of death and the remaining in the form of monthly income for 15 years.
- You also have the option to choose increasing monthly income where 100% of the assured sum will be paid at the time of death as well as 0.5% of the assured sum will be paid in the form of monthly income for up to 10 years.
Conclusion - Should You Buy A Term Plan With Monthly Income Option
Well, if you understand the objective of the term insurance policy then I am sure there is no alternative to a pure term plan. As soon as the policyholder dies, you will get the lump sum amount in your hand and then you can plan your future financial life accordingly.If you are not sure whether your family can handle that money properly, then better you can start educating your family about the importance of financial planning. You can discuss your term insurance policy and how to plan with the money in case of your death.
If you think this is difficult, then I think you can consider this list to start your research on choosing the best term insurance policy with monthly income benefits. Write a comment below and share your feedback or experience if any.
1 Comments
very nice post, thanks for sharing.
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