TomorrowMakers ™

Income protection plans: ensure your family is always protected

Income protection plans: ensure your family is always protected

In depth understanding of what constitutes monthly income insurance plans and how they can help ensure uninterrupted income for your family.
 

If at some point you have asked yourself, “Who will look after my family when I’m not around?”, you are not alone. It is natural to wonder how the absence of you and your income will affect the financial and hence the emotional stability of your loved ones.

It is with such situations in mind that insurers introduced income protection plans. By ensuring regular income pay-outs, these plans help your loved ones maintain the lifestyle you worked hard to give them, even in your absence.

So how do Income Protection Plans work?

In regular Term Plans, in case of the death of the insured person, his beneficiaries receive the lump sum amount known as death benefit. However, the beneficiaries may not be equipped to make the most of this pay-out, and may be unable to stretch it over a long period of time.

Income protection plans allow you to choose how your loved ones receive the pay-out - be it monthly, quarterly or annually. With this there is no fear of the lump sum being misused.

Thus, the basic premise of such plans is to provide an Income Replacement, on death of the insured. The beneficiary gets regular monthly income known as monthly benefit for the insured’s entire working life, up to the age of 60 years.

Related: 5 easy steps that make retirement at 45 a possibility

You should purchase such a plan if:

  • You are the sole or major earning member of your family
  • You want to ensure regular income for your family even if you are not around
  • You want your insurance plan to periodically incorporate increasing cost of living due to inflation
  • Your loved ones depend on your income for financial stability
  • You want your family to be taken care of in case of your death or disability

For the sake of better understanding, let us take the example of Ravi, who has recently bought Aegon Life’s iIncome Insurance Plan.

bryu.jpg

In the following situation, an unfortunate event occurs in the 5th Year of the policy, leaving Ravi’s family bereft of his support.

nmbk.jpg

As shown above, the insurance plan he has chosen ensures that his family is supported financially throughout his working life.

In the following situation, however, Ravi has an accident in the 5th year of the policy which hampers his ability to work and earn an income to support himself and his family.

nln.jpg

In such an instance, Ravi is given 50% of his monthly income under the plan on a monthly basis by the insurance company, till the term of the plan ends. Moreover, Aegon Life will also waive off the future premiums under the plan, thus enabling Ravi to look after his family in the face of such adversity.

Related: Common mistakes when purchasing insurance [Video]

But what if today’s income is not enough for tomorrow’s cost of living?

We all operate in an economic environment that is susceptible to inflations and price rise. Continuing with the above example, though Ravi’s family is guaranteed a specified amount as monthly pay outs in case of an unfortunate event, the same amount of money will not be enough to meet future financial requirements, say 10 to 15 years down the line, especially when the price of all commodities would have appreciated due to inflation.

This is why some insurers tend to increase the pay-outs by a fixed percentage every year, like Aegon Life increases it by 5% each year.

We often take loans and pay EMIs to make sure we can give our family everything they need and want. In case of an unfortunate event, we don’t want the loss of our income and financial support to cause them stress or derail the lifestyle we worked hard to give them. Monthly income replacement plans are the best way to ensure your family is well taken care of no matter what.

To know more about Aegon Life iIncome Plan, click here.

 
 
 
 
 
 
 

Insurance Plans

Term plan

Term plan

Term Insurance Plans are pure protection plans which provide life cover at a nominal cost. These plans are the simplest type of life insurance plans.

Term plans with return of premium (TROP)

Term plans with return of premium (TROP)

If you have always wanted a term plan that rewarded you for surviving the term of the policy, a Term Plan with Return of Premium is the perfect life insurance policy for you.

Unit Linked Insurance Plan (ULIPs)

Unit Linked Insurance Plan (ULIPs)

Having a life insurance policy is not a luxury but a necessity. It ensures that the financial future of your family is secured no matter what happens.

Child plans

Child plans

Child Plans are specific insurance plans which help parents save for their child’s future expenses in a systematic manner.

Home Insurance

Home Insurance

Home insurance is a fairly new concept in India when compared to other types of insurance like life and health. We’ve thus created an easy to understand guide to Home insurance for your ready reference.

Car Insurance

Car Insurance

We’ve prepared for you a comprehensive guide to car insurance- it’s everything you’ve ever wanted to know, and more.

Health Insurance

Health Insurance

A prolonged illness and a sudden accident alike can greatly impact your financial stability. Choose the right insurance plan to protect you and your family against unplanned disasters

Whole life policies for dummies

Whole life policies for dummies

In case of whole life insurance, policy benefits are not restricted to a fixed term & extend to the entire lifetime of the policyholder.

Income protection plans: ensure your family is always protected

Income protection plans: ensure your family is always protected

In depth understanding of what constitutes monthly income insurance plans and how they can help ensure uninterrupted income for your family.

boy

We would love to hear from you!

Question, comment or concern? Our contact form is the best way to get in touch. We will respond to you within 5 working days.

newsletterNEWSLETTER