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Term Insurance 906 views October 20, 2018
Costs are increasing with rising inflation. An amount earned today might not be sufficient to take care of expenses that may arise five or ten years hence. The amount of life cover that you choose on your term insurance depending on your current income may ensure financial security for a short period, but may not be enough to repay the debts or loans that you may have taken while alive. No matter how morbid it may sound, the extent of life cover you choose must not be limited to what your life is worth, thus, triggering the need to opt for an increasing term policy, also called incremental term insurance.
Incremental term insurance is inflation-adjusted term insurance plans in which the amount of sum assured increases by a fixed percentage each year. In some cases, the rate of increase can be as high as 10 percent every year, thus, securing loved ones from the burdening and pervasive impact of inflation. In addition, incremental term insurance plans are different from level term policies in the sense that the premiums towards the former increase every year as opposed to the former requiring payment of fixed premium amounts. However, like most term insurance plans available in the market, incremental term policies allow the scope to opt for additional riders, thus, offering greater protection. One may opt for multiple rider benefits like critical illness rider and accidental death benefit rider. In addition, other kinds of riders that allow scope for premium waiver available in level term insurance policies are also available with inflation-adjusted term insurance plans.
Currently, only the following incremental term insurance plans are available in the market.
| Insurer Name | Name of the Insurance Plan | Limits of Sum Assured Allowed | Percentage increase in the Sum Assured | Salient Features |
|---|---|---|---|---|
| Aditya Birla Sun Life Insurance Company Limited | Birla Sun Life Insurance Protect @ Ease | Equal to or more than Rs. 30 lakhs | 5% or 10% simple rate of increase in the sum assured at the beginning of each year |
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| Aditya Birla Sun Life Insurance Company Limited | Birla Sun Life Protector Plus Plan | Equal to or more than Rs. 30 lakhs | 5% or 10% simple rate of increase in the sum assured at the beginning of every year |
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| SBI Life Insurance Company | SBI Life Smart Shield | Equal to or more than Rs. 25 lakhs | 5% simple rate of increase in the sum assured at the beginning of each year |
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| SBI Life Insurance Company | SBI Life eShield Plan | Equal to or more than Rs. 20 lakhs | 10% simple rate of increase in the sum assured at the beginning of each year |
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