Catch Team | Updated on: 27 April 2017, 16:49 IST


Charan Singh is a System Analyst working with a leading IT firm. He is the single child of his elderly parents who are entirely dependent on him. Personally, Charan Singh is an adventurous person and takes short breaks from the work from time to time to enjoy his love for adventure sports like scuba diving, trekking, camping, rafting, etc.

He got a great new job offer from another company, and he decided to go ahead with it. He resigned from the current company and had still one month to join the new business. With the resignation, his group term life insurance was revoked, and he did not have any secondary term plan for backup.

He decided to utilize his one month break to go on an adventure trip for trying bungee jumping this time. But unfortunately, while standing on the cliff, he slipped and fell from the cliff. The good thing was that the rope was already tied so, he got away with only minor injuries.”

One question has been ringing in his ears ever since this incident, “How will his parents, who spent all their fortune on his education, survive if anything unfortunate happens to him?”

Sundar Rathi’s employer provides term insurance coverage to all his employees. He recently got married to Ishita and thinks that he should increase the life cover to include his spouse, another dependent.

But, employer’s group insurance cover is based on the salary and rank of the employee. Thus unless he gets a promotion, it won’t be possible to get an increased cover.”

Sundar is in doubt, should he wait for the promotion or get another term life cover for himself?

Shakti Kapoor has been working for Zoolozical Infra for the last 15 years and was provided a group term life insurance plan and health plan from the company. Despite, the rising cost of medical expenses and hospitalization, he was confident that the group plans sufficiently cover for any eventuality, after all, he maintains a good lifestyle, takes care of his health, and stays away from life-threatening situations and activities.

But, recently he suffered from kidney failure which needed an immediate hospitalization and dialysis. His health cover was just for Rs. 2,00,000 which covered only the hospitalization expenses. He will need to stay on dialysis until he finds a replacement kidney.”

Shakti wonders, “What could he had done better to have avoided this kind of situation.”

What Should You Do to Stay Secured in Such Situations?

In all the scenarios mentioned above, even though the three of them had a group term plan from their employer, but they fall short at some point in their lifetime. Group Term insurance plans are meant to avoid any distressing financial situation for the family in case of any unfortunate event. But, sometimes they fail to provide adequate financial assistance to the household.

Hence, to avoid such situations, you should consider buying an individual term plan as well to make sure that all your risks are sufficiently covered. Individual term plans will be beneficial in following cases:

  • In case of a job change: Group term life insurance cover comes to an end as soon as you resign from your current job. So, it may be possible that there is a time lag between till you join a new employer. Also, the new company may provide you lesser coverage or even a no coverage. In such a case, individual term plan will provide you adequate coverage.

  • In case you are starting a new business: If you decide to start a new business or venture on your own after leaving your job, then you will not be covered by any group term insurance plan. (Individual term life will be beneficial in such case, as your life risk will be covered.)

  • In case you are nearing retirement: Your group term cover also ends once you reach your retirement age. It can be quite difficult to get a term plan once you reach your retirement age. So, buying an individual term plan at right age can cover you for a longer period.

  • Tax benefits: The amount of premium paid in respect of term life insurance cover is eligible for deduction u/s 80C, and even the maturity claim is tax-free in the hands of the beneficiary.

  • Lower premiums: In comparison to other life insurance policies, the term plans provide a huge amount of coverage at very affordable premiums. So, you do not need to put aside a large amount for premiums to get you a sufficient cover.

Term plans are an essential part of a good saving plan. It ensures the financial stability of your loved ones in case of your untimely demise. So, in case you are thinking about buying a term plan for yourself, then just visit SecureNow to understand about various term plans available for you in the market.


First published: 27 April 2017, 16:49 IST