Lump Sum Benefit in Term Plan

A term plan is a pure death benefit plan. A term plan is a perfect insurance policy for anyone who is looking to provide a financial security for the family in the absence of the bread-winner.

A term plan provides financial stability to the family of the insured. The nominee/ beneficiary receives the sum assured, if the insured passes away during the tenure of the term plan.

The policyholder can decide the payout of the sum assured at the time of purchase.

The different payouts offered under Term Insurance:

• Income benefit
• Increasing income benefit
• Lump sum benefit
• Combination of lump sum and income benefit/increasing income benefit

The lump sum payout helps the family of the insured to get stabilize financially immediately in the absence of a bread-winner without worrying about expenses and other basic needs.

It provides an immediate cash flow at the disposal to the policyholder's family.

Benefits for Lump sum benefit:

• Immediate cash flow
• The amount can be used to pay any liabilities or debts immediately
• It helps to pay children's education, marriage, medical emergency, household, expenses, etc. that may arise in the absence of the bread-winner
• Few companies asks same premium amount irrespective on the type of payout, but some companies may offer a lower annual premium when you opt for a lump sum benefit as compared to the staggered monthly payouts.