What is Term Insurance with a Monthly Payout? Compilation By CA Sayan Ghosh


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Some insurance policies offer an option of selecting a monthly payout over a period of time instead of a lump-sum payout in case of death during the term.
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The monthly amount can be opted as a flat amount or with a percentage increment every year to adjust for inflation.
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The monthly payout is like a pseudo salary which comes every month for certain years.
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This payout is exempt from tax for the beneficiary.
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It is particularly useful for families with limited Financial exposure where there is a possibility of the lump-sum amount being mismanaged or squandered away.
- A bank a/c saving of ? 1 Crore as FD, which will at 7% generate a yearly income of ? 7 Lakh for your family.
- A sizeable investment which might grow to a corpus of ? 1 Crore, before your death.
- If you can't manage to create a large saving/ investment, then a viable option is a term plan of ? 1 Crore. It will pay this amount to your family on your demise. Premiums for a ? 1 Crore life cover start at ? 490 per month2 only, which is less than half the cost you would pay for dinner with family at a restaurant.
If you are ever diagnosed with a critical illness, it can affect you physically, emotionally and financially. ICICI Pru iProtect Smart offers the optional benefit of covering 34 Critical Illnesses such as cancer, heart attack and kidney failure for a maximum of 30 years without any change in premium. But here’s the best part - It gives full claim payout on the first diagnosis of any of the covered 34 Critical Illnesses. No Hospital Bills required**. This amount can also safeguard your family against the loss of income arising out of the illness.
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About Author
CA SAYAN GHOSH
Qualification: Chartered Accountancy course
Company: Sayan Ghosh & Co.
Location: Kolkata
Member Since: 20 Feb 2020 | Total Articles Contributed: 19
About Author :
"Associate Chartered Accountant in Practicing Field basically in Direct Tax Matters and Indirect Tax Matters".
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