The main reason to buy a term insurance plan is to financially secure your family in case of your sudden death. This means having enough money to manage all future expenses and obligations. For this, your term insurance benefits should be enough for anytime that your family needs to make a claim.
If you wished to send your child to study abroad in 10 years’ time, but unfortunately die today, is your current sum assured enough to fund his/her education 10 years later? You need to consider other expenses like your spouse’s future medical expenses, buying a new home, and overall better lifestyle. Now, if inflation ends up ruining your plan for leaving your family with enough money, there is no way out of it unless, you can find a way to increase your cover amount later. But how can you increase your cover amount if you have already bought the policy? Here are two ways you in which you can.
- Buy another policy
It may happen that the coverage offered by one policy may not be enough for the requirements your family may have in the future. In this case, you can simply buy another term insurance policy to augment the plan you already have. This means that you have two policies with a high amount as the death benefit. Your family can claim both of these in case you die. In addition, depending on the coverage you choose for the second policy, you may have double the coverage for your family that a single policy would offer.
- Get increasing cover term insurance
While you can choose to get another policy, getting it may not be as easy as you may think. Firstly, you will have to go through the entire process of buying a policy again. Depending on your insurance provider, this would mean a tiring documentation process. Moreover, just like the previous policy, you would have to go through a set of medical tests for the new policy. Depending on your age and health at that point, the coverage offered and premium asked for would be very different. In such a situation, either you wouldn’t get a suitable policy or you would be rejected altogether.
Instead of going through this hassle, you can always opt to increase your term insurance cover amount. An increasing cover term insurance plan allows you to increase the sum assured each year. You do not need to show any new documents or go through any processes for this update. There is a higher limit to how much the sum insured can be increased to. However, your premium will not increase with your coverage. Use a term insurance calculator to know how much your chosen term plan costs.
While the premium for an increasing cover term policy is a little higher that a regular term plan, it remains the same throughout the policy term. Since, term insurance itself is known to be a much cheaper option for life coverage, a slight increase in the premium for an increased cover option would not be troublesome.
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