Can Life Insurance Be Purchased For Disabled People?

Life Insurance plan is quite similar to medical insurance, where you get paid if you are sick. Here, your dependents will be paid in the event of your death. You need to pay regular premiums to the insurance company. In return, the insurance company offers you a lump-sum amount in the event of your death during the policy period. There is no maturity value in the case of a life insurance plan. It means that if the life insurance plan is for 30 years and you paid regular premiums, there is no maturity value at the end of 30 years if you live.

A life insurance plan for disabled people is a special kind of insurance plan, where a nominee is a disabled person. The insurance provider doesn’t pay a lump sum amount to a nominee on the insured’s death. Instead, regular payments are made to the dependent until death. This is a valuable scheme for disabled people. They can live a normal happy life, even after the death of their guardian.

Life Insurance Plan for Disabled and its Features

A life insurance plan for the disabled is a limited-period payment plan that offers a lump sum and a series of regular payments to the dependent after the death of the insured. Mostly, the payments made under this scheme are for a maximum period of 35 years, and the benefits received are till the death of the disabled dependent. The features of the life insurance plan for the disabled are:

• The insurer should be between the ages of 22 - 65. The premium amount is determined based on the age of the disabled nominee. The younger the nominee, the lower will be the premium amount. So it is always advisable to start a life insurance plan early.
• The sum assured of the disabled life insurance plan starts from ₹50,000, and there is no upper limit. So the insured should decide the upper limit based on the requirement of the disabled dependent.
• A disabled life insurance plan covers the entire life of the dependent. The dependent receives a stable income from the insurance company until death.
• The premium can be paid over a few fixed tenures, or single payment of the premium can also be made. The longer the tenure, the lower will be the premium amount.
• In the case of the insured’s death during the policy period, a certain percentage of the maturity value + guaranteed bonus + terminal bonus is provided to the dependent. The rest of the sum assured is converted to an annuity and fixed, regular payments are made to the dependent until death.
• Life insurance plans for the disabled also come with many optional benefits. These benefits can be added during the policy term to make the dependent more secure. The maturity value can also be altered by paying an extra premium.
• The benefits from the life insurance plan should be used only by a disabled person. The features have been added to give a good life to disabled persons. Hence, it should not be misused.
• The premium paid for the life insurance plan for the disabled is fully tax-deductible under section 80DD. So the premium you pay towards the life insurance plan will reduce your tax liability.
• In the case of the early death of the dependent, the policy expires. The insured can claim a refund of the premiums paid in the policy period.

Factors To Consider Before Buying A Life Insurance Plan For A Disabled Person

There are several factors that an insured should consider before buying a life insurance plan for disabled dependents. The factors are:

• Choosing The Right Sum Assured

The sum assured is very important in a life insurance plan. The insured should choose the right sum assured, adequate for the dependent. If the sum assured is less, it may be difficult for the disabled to manage his/her expenses after the guardian’s demise.

• Premium As Per Financial Capacity

 The premium of the life insurance plan depends on the sum assured and tenure. If the premium is too high, the insured may not be able to pay the premiums regularly, and the policy may lapse.

• Trustworthy Insurer

A life insurance plan is a long-term commitment. You are planning to protect your dependent’s life. So when the commitment is long, the insurer’s credibility is an important factor that needs to be considered. The insurer should have goodwill in the market.

Conclusion

Life insurance plans for the disabled are important in countries like India. As we lack proper amenities and social security to take care of the differently-abled, guardians must ensure that their disabled dependents are protected throughout. Choose the right life insurance plan for the disabled, pay regular premiums throughout the tenure, and secure the future of your dependents.

Also read: 

Life Insurance or Fixed Deposits? Which Is Better?

Why Life Insurance Is A Must Have For Home Makers?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.