Life’s unpredictability can be financially devastating, especially when a family loses an earning member. This underscores the importance of financial planning, particularly for those aiming to achieve goals such as buying a house, funding education, or securing their retirement.
As a basic principle, individuals should adopt the “First Protect then Save” approach. The initial step in establishing a financial savings strategy is acquiring a term insurance plan. This precaution is crucial because it ensures that if the earning member were to pass away, the family can still maintain their savings plan. Ideally, the life cover amount should be adequate to settle all outstanding debts and provide sufficient support for the family to sustain their livelihood.
ICICI Prudential Life includes the ‘Life Continuity’ feature in its popular term insurance product, ICICI Pru iProtect Smart. This option allows families to receive the claim amount as monthly income, which is particularly beneficial for those who may find it challenging to manage a lump sum payment.
Families who are not accustomed to handling large sums of money may find receiving the payout as monthly income to be a more manageable choice. This approach can aid in budgeting and provide a steady stream of funds to cover ongoing expenses. The monthly income offers sustained financial security for the family, particularly crucial for dependents relying on the deceased’s earnings. It effectively covers essential expenses such as rent, groceries, and children’s education.
Another significant add-on feature is the critical illness benefit, which is highly recommended. Research indicates that approximately 10 crore Indian families fall into poverty annually due to healthcare costs. For a modest extra premium, iProtect Smart includes the critical illness benefit, covering 34 conditions like cancer, kidney failure, leukaemia, Parkinson’s disease, and more. This benefit ensures that policyholders receive a payout upon diagnosis, providing crucial financial support for medical treatment.
Critical illnesses often lead to substantial financial burdens, including costly treatments, medications, and potential loss of income. iProtect Smart’s coverage for 34 critical illnesses at a reasonable additional premium makes it a cost-effective method to secure financial protection. The payout upon diagnosis can help with treatment expenses, relieving the insured person and their family of financial burden.
Before purchasing a term insurance plan, individuals should prioritize checking two critical factors: the claim settlement ratio and the average claim settlement time. In FY2024, ICICI Prudential Life boasted an impressive claim settlement ratio (non-investigated) of 99.17% and an average settlement time of only 1.27 days. Taking on the responsibility for one’s family involves committing to secure and protect their future. According to many financial experts, term insurance forms the cornerstone of responsible financial planning.
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Published: 05 Jul 2024, 01:08 PM IST