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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

What is a Lump Sum Benefit?

The lump sum benefit is one of the payout options you can opt while buying a term insurance plan. When you opt for a lump sum benefit payout option, the nominee/beneficiary receives full payment of the sum assured at once.

For instance, consider a case: A 30 year old male, non-smoker, opts to go for a 30 years of tenure with a term plan of sum assured as Rs. 1 crore. The annual premium for a basic plan for him would be anywhere in the range of Rs. 7,000 to 17,000 depending on the plan and the insurance company. Whichever insurance company he opts, the sum assured of Rs. 1 crore will paid out at once to his nominee/beneficiary in case if he passes away during the policy period of 30 years.

Is It Beneficial to Buy a Term Insurance With a Lump Sum 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.

Plans offered by Coverfox

Here’s Is the List of Companies That Offer a Lump Sum Benefit Option As a Payout:

CompanyTerm Plans with lump sum benefit
HDFC LifeHDFC Life Click2Protect Plus
Aegon LifeAegon Life iTerm
Edelwesiss TokioEdelwesiss Tokio TotalSecure+ Edelweiss Tokio - MyLife+
Max Life Insurance Max Life Online Term Plan
Future GeneraliFuture Generali - Flexi Term Plan

Other Companies and their Plans

Company Plans
Life Insurance Corporation of IndiaLIC's e-Term
Birla Sun Life Insurance Company LimitedBSLI Protect@Ease
TATA AIGTata AIA iRaksha Supreme
PNB MetlifePNB Metlife - Mera Term Plan
Bajaj Allianz Life Insurance Company LimitedBajaj Allianz iSecure
Kotak Life Insurance Kotak Preferred e Term Plan
Canara HSBC Life InsuranceCanara HSBC Life - eSmart Term Plan
SBI Life Insurance CompanySBI Life – eShield
Reliance Life Insurance Reliance Online Term
Aviva Life Insurance Aviva I Life
Bharti AXA Life InsuranceBharti AXA Life – eProtect
IDBI Federal Life Insurance Company LimitedIDBI Federal – iSurance
IndiaFirst Life Insurance Company LimitedIndiaFirst Life - Anytime Plan
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