Zee Exclusive: In times of COVID-19, what is the importance of Term Insurance?

New Delhi: The COVID-19 pandemic has disrupted our lives in many ways. With the several rounds of lockdowns and restrictions; we have adapted to a “new normal” of living. 

Consequently, many consumer habits and priorities have changed course since last year. One such change has been observed in the outlook and awareness towards life insurance plans, specifically for term insurance. Insurance plans which were earlier considered push products have generated a lot of self-interest amongst customers. Term plans which were in the past bought predominately by the urban and more aware segment of customers, have experience a spike in interest and purchase in all customer groups. (Also read: Looking to buy health insurance policy? First time buyers must check out 5 major tips)

Importance and benefits of Term Insurance 

Term insurance plans have always been considered as a key element of financial planning for every family. Term insurance plans are the basic offering that a life insurance company offers where the nominee of a customer is provided a guaranteed sum assured value on the unfortunate death of the life proposed during the term of the plan. 

A customer can also avail additional benefits along with term insurance in the way of add-on riders like – Critical illness rider – that compensates the life assured with a fixed amount on the occurrence of a critical illness like cancer, heart diseases etc.; Disability benefit - that compensates the life assured with a fixed amount on the occurrence of a disability that impedes future earning capacity; etc. 

The main aim of term insurance thus is to secure the earning of the bread winners in a family in the face of uncertainties brought about by loss of life or earnings. 

The second wave of the pandemic has been severe and the predictions for the near future are also bleak. Considering that the element of uncertainty has increased rapidly over the last year in our lives the need to secure the future of loved ones and dependents has become more crucial. 

(Expert comments by Casparus Kromhout, MD & CEO, Shriram Life Insurance)