Term insurance plans are one of the most preferred financial products that people go for. The reason for this is that such insurance policies provide a financial safety net for one’s family. Now, as you grow older, it is natural to take on more responsibilities. You might have a family or have dependents relying on your income. In such cases, while having a term insurance plan can definitely be helpful, you might look to increase its insurance cover. Read on to understand more about increasing your term insurance cover in detail:
How to increase a term insurance cover?
- You can choose the option of life-stage increment
Some policyholders can check with their insurance companies about increasing the sum assured of their insurance policies at certain points in their lives. Do note that not all insurers will provide this offer, so make sure to check whether the term insurance offers this option before buying the plan.
- You can buy a new insurance policy
One of the most common ways of getting more insurance coverage is to just buy a new policy. For this, keep in mind that you will have to complete the insurer’s documentation process all over again and also take new medical tests. Also, note that now that you are older, buying a new insurance policy could prove to be more expensive. Even if you get another insurance policy, consider the fact that you will now have to oversee two separate insurance policies.
- Get an increasing term insurance policy
Unlike the workings of a regular term insurance plan, an increasing term plan increases the sum assured mentioned in the policy every year. The premiums that policyholders pay for an increasing term insurance policy may or not change during the policy tenure, depending on the plan chosen. The coverage provided under this insurance policy will also depend on the policyholder’s health at the time of buying the policy. Insurance companies offer these plans knowing that with the changing circumstances of life, customers might require higher coverage for their family as time goes by.
Benefits of getting an increasing term insurance policy
- No documentation hassles
While buying a new policy for additional coverage, you might have to submit loads of documents, sign a declaration, undergo medical tests, or even find out what is the term insurance policy’s new terms and conditions. This might be quite a lengthy process which could be troublesome. However, this is not something that you need to be worried about when it comes to an increasing term insurance policy. With this insurance policy, the sum assured will automatically increase. There is no need for you to submit any additional documents, go through any added terms and conditions, or undergo medical tests.
- Only one premium to worry about
Those buying another insurance policy will have to pay separate premiums for this new plan. This might be even more expensive given their age and health status. However, this is not something to worry about with an increasing term insurance policy, as you only have to pay a single premium and can improve your coverage too.
- There is no risk of getting rejected by the insurer
When buying a new insurance policy, there is always a risk of rejection. The rejection could be because of numerous reasons such as age, medical history, lifestyle habits, and so on. However, with an increasing term insurance plan, the coverage will just keep increasing without you having to go for any additional medical tests.
With rising expenses, you would require an insurance policy that provides a higher financial cover too. In such cases, an increasing term insurance plan could be the ideal solution to maintain a good lifestyle. Such a plan will also help in coping with inflation and achieving other financial goals. Now, before buying this policy, it is advisable to use a term plan calculator. This calculator is an online tool that helps users get an estimate of the premium that they would have to pay for the insurance policy they are buying. Using this calculator will help you in finding a term plan that could be an affordable option.