How Increasing Sum Assured in Your Term Plan can Help You in Fighting Inflation?
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An increasing term insurance cover is a kind of term plan, wherein the sum assured selected while purchasing the policy increases by a specific amount with each passing year. This term insurance feature is specially designed in order to keep inflation in check. With an increase in age, responsibilities also grow. It is quite possible that the insurance cover that you may have opted for at the time of commencement of insurance policy, might not be sufficient for you later, as along with income, liabilities and expenditures also increase manifolds with time. To deal with such a situation effectively, you must purchase a term insurance plan with an increasing sum assured feature.
How Increasing Sum Assured Under a Term Plan Can Be Helpful?
With the feature of increase in sum assured, a policyholder is allowed to increase the coverage of their insurance plan at regular intervals. This would help you in managing the increasing expenses concerning your family members, which might also keep on changing with time.
Some of the benefits of increasing your sum assured under a term plan are listed below:
1. Affordable Premiums
Even in case you select an increasing sum assured option under your term insurance plan, the premium payable would be affordable and low. Moreover, the amount of premium payable would remain constant throughout and would not burn your savings. This simply means that even if you opt to increase the sum assured during the plan tenure, the amount of premium would not increase.
2. Effective Against Inflation
Inflation means the amount of increase in the cost of goods and services over a specific time period. The inflation rate keeps on increasing and thus, it is important to keep it in mind at the time of purchasing any financial instrument. To state simply, in case you opt for an increasing sum assured under a term plan, you would be able to manage additional expenses with ease without losing your financial stability and peace of mind.
3. Aligns with Transforming Life Phases
Consider this scenario, suppose you had purchased a term insurance plan when you were a bachelor. However, after some time you got married and now you are looking forward to safeguarding your spouse financially. Here an increasing sum assured term insurance cover would help you with meeting your changing life phases, your transforming needs, requirements etc and would keep you in alignment with your financial goals.
In a Nutshell
If you believe that you are still quite young and would not find the need to increase your sum assured at the moment, you can do it later on too. Also, you do not have to go through a long process of documentation to make changes to your sum assured amount under the current term insurance plan. Get yourself prepared in advance against every curveball that life throws at you by buying a term plan today.
Also read - Why Do You Need Term Insurance Coverage?
Most Common Life Insurance Queries: Answered!
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.
