Why Is It Necessary to Have Life Insurance During COVID-19 Pandemic?

The COVID-19 epidemic showered ordinary people with countless uncertainties and despair in their lives. The working class was afflicted by job losses and salary cuts, while India's small enterprises faced severe challenges in their revenue share. Aside from the instability, many families have also lost loved ones due to the pandemic. This loss not only created mental distress, but it also had a financial impact on the survivors, as it often meant the loss of their principal or sole source of income.

In the financial world, life insurance has traditionally been a recommended tool. Moreover, with the ongoing global epidemic, the significance of insurance has become even more apparent as when it comes to protecting your loved ones in an emergency, no individual wants to be unprepared. So, continue reading to find out some more reasons behind our recommendation of a life insurance policy, especially in such testing times of the Covid-19 pandemic.  

Why Is It Necessary to Have Life Insurance During COVID-19 Pandemic?

Not only is the pandemic causing health issues, but it is also a financially difficult situation. While the effects of Covid-19 vary from person to person, the medication can be costly for most people. The expenditures for ventilator-dependent patients are significantly higher. Furthermore, there are estimated charges that vary depending on whether the hospital is private or public. Hence, purchasing insurance is therefore critical at such times. Moreover, there are numerous reasons why life insurance proved to be particularly beneficial during the epidemic, ranging from providing lump sum payouts as part of the life cover to generating market-linked profits. So, let’s learn about the utility of different kinds of life insurance policies during the Covid-19 pandemic.

How Did Different Life Insurance Policies Help Policyholders Deal With the COVID-19 Pandemic?

The different types of life insurance policies helped most of the policyholders deal with the Covid-19 pandemic in different ways. 

• Term Insurance Plans

Term plans provide life coverage to the life assured for a set period. If the life assured dies during the insurance period, the nominee receives a death benefit. Aside from these benefits, term insurance is one of the most cost-effective life insurance policies available, as it offers you a significant sum assured amount at cheap premium rates. Term plans assisted policyholders in dealing with the pandemic's aftermath by providing a financial safety net on which the surviving members could rely. This enabled them to satisfy their financial commitments, such as loan repayments, children's school fees, and even basic rent and electricity expenditures.

• Unit Linked Insurance Plans (ULIPs)

Unit Linked Insurance Plans (ULIPs) are market-linked plans that combine investment and insurance coverage into one package. They provide life insurance coverage while also allowing the policyholder to participate in either equity or debt funds (or both). ULIPs assisted policyholders to cope with the effects of an emergency like the pandemic by allowing them to profit from market movements. Even in the case of COVID-19, the markets bounced back quickly after a brief dip, and the policyholders with ULIPs benefited from these market fluctuations. They also provided life insurance that included coverage for COVID-19 patients.

• Endowment Plans

Endowment plans are non-participating savings plans that allow you to build a corpus systematically over time to accomplish your long-term goals. They offer insurance benefits as well as assured benefits. The life insurance policy protects your loved ones in the event of your death. Furthermore, savings plans offer guaranteed returns after policy completion. This type of life insurance plan also proved to be pretty helpful during a crisis such as a pandemic because the life cover it provided could provide financial security in the event of any unanticipated event.  Furthermore, the guaranteed payouts turned out to be an excellent return on investments for those lives assured who lived till the plan term completion.

Endnotes

The arguments mentioned above showed the significance of life insurance in the context of COVID-19. Regardless of the type of life insurance you choose, you will benefit in a variety of ways. So,  remember to use a life insurance calculator before selecting a plan to ensure that you and your family have appropriate life insurance coverage.

Also read 

Understanding Accidental Benefit Riders in Term Insurance

Difference Between Limited Pay & Regular Pay in Term Insurance

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.