Term insurance: Find out effective ways to increase sum assured

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In term insurance, the sum insured amount is always crucial as it is the financial support for the family of the policyholder in their absence. This is the amount on which the family largely depends to fulfill the needs and dreams of the family members, whether it is child’s education or marriage or repaying home-loan or anything incurring a huge cost. While, there are several methods explained to zero upon the sum assured amount, however, nothing can be as accurate to judge the future estimations.

Thus, it is essential to understand ways to increase the sum assured amount while the term insurance is ongoing depending upon the unwinding circumstances in life.

Ideal process

The foremost method is to buy a new term insurance plan to get an additional amount. In this, a person can apply for a new term insurance scheme with a suitable coverage amount. However, the purchase of a new policy may require new documentation and medical check-ups and the premium also may range high because of increased age and new medical conditions.

The second option to increase term insurance coverage is with a life-stage protection feature. This allows increasing term insurance’s sum assured by a certain percentage of existing cover at two key milestones in the policyholder’s life: The first at marriage and the second at the birth of a child (up to two children). The feature doesn’t require any medical routine.

The premium goes up as it is re-calculated based on rising age along with higher sum assured and remaining policy term in life-stage protection. The increase of sum assured amount is mounted based on re-calculation done on the aspect of rising age along with higher sum assured and remaining policy term. Most importantly, the term insurance scheme must offer this option at the time of purchase.

The third means to surge the sum assured amount of term insurance is increasing term cover. As the name suggests, an increasing term insurance plan is a plan wherein the sum assured chosen on plan commencement increases every year by a specified amount decided at the time of purchase of the policy. Despite an increase in sum assured, the premium remains the same throughout the policy tenure.

Conclusion

A new policy can be taken to make a fresh investment for a special reason such as a child’s education or high studies or marriage goals. Also, a separate plan can be useful to buy with pension plans to secure older age.

Life Stage Growth is beneficial for people who start investing in term plans early in life and yet get new responsibilities with the marriage. They can opt for this option to get enough sum assured at different stages of life

Increasing Term Cover is designed for the masses who are looking for convenience with an automatic increase every year with the increasing age.