SUCH TERM PLANS OFFER FLEXIBILITY IN COVERAGE
Tailored plans make it easy
for self-employed to buy insurance
Such flexibility allows
self-employed people to buy term insurance without the rigid documentation
previously required. Also, simplified underwriting processes and the ability to
adjust coverage over time enhance accessibility, ensuring that those with variable
incomes can secure adequate protection.
Insures such as HDFC Life, and
Bajaj Allianz and Max Life have customized their term plans to meet the
specific needs of self-employed people. Sales of such plans are driven by young
entrepreneurs. A study shown that 74% of self-employed term insurance buyers
are aged between 27 and 38, reflecting the proactive approach of younger
entrepreneurs in securing their financial future.
Self-employed individuals face
unique challenges when purchasing a term plan, such as inconsistent income and
difficulty providing proof of earnings and traditional term plans may not cater
to their fluctuating financial situations. However, tailored plans from certain
companies offer flexibility with customizable premiums and coverage amounts,
making it easier for self-employed individuals to find suitable options.
Sum Insured
Unlike salaried employees,
self-employed individuals do not have a steady paycheck or employer-provided
benefits, making life insurance even more essential for providing financial
stability. Term insurance provides financial security and ensures their families
are safeguarded from financial hardships.
It is crucial for
self-employed individuals to secure their family’s future in the absence of a
steady monthly salary. The sum insured should ideally be 10-15 times their
annual income, factoring in debts, financial goals, and dependents, needs. This
level of coverage ensures that dependents can maintain their lifestyle and meet
financial obligations without the burden of financial strain.
What to factor in
self-employed individuals should first assess their financial situation and
choose adequate coverage that reflects their income potential. They should also
account for existing loans, business debts, or liabilities that may need to be
covered in case of any eventuality. They should also assess their income
stability as fluctuating earnings can impact premium affordability.
They should evaluate any
existing debts or financial commitments, such as loans or mortgages, which
could increase the coverage needed. Understanding the policy’s terms, including
any exclusions and the flexibility to add riders or adjust coverage, is also
crucial. Finally, they should consider the insurer’s reputation, customer
service, and claim settlement ratio to ensure a reliable and supportive
experience when it matters most.
Self-employed people must
factor in the financial needs of their dependents like living expenses and
future needs like children’s education. They should evaluate different types of
plans available and what would work for them – a regular term plan, return of
premium plans, or the newly-introduced income protection plans.
Riders to opt for
Customized term plans offer
riders such as monthly income benefit, waiver of premium or income replacement.
These riders provide regular monthly payments to dependents after the insured’s
death or waive premium payments if the insured becomes incapacitated and even
financial support if the policyholders face critical illness or disability.
This support helps self-employed individuals maintain financial stability when
their income is interrupted.
For More Details: Pooja Manoj Gupta, visit www.giia26.com
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