Top reasons for the increasing popularity of term plans and ULIPs amid COVID-19 Pandemic
The recent COVID-19 pandemic impacted individuals’ lives worldwide, which resulted in job losses and pay cuts. Not only that, many people lost their loved ones due to the Coronavirus. As a result, people realized the importance of financial protection for their life and started investing money in insurance plans. However, while insurance provides more security for a person, it is wise to know more about the coverage and other details before investing money.
Choosing the right type of life insurance helps to ensure death benefits and gives ways to earn wealth. Ankur is an employee who is working in a private company. He wants to safeguard his family from any future uncertainty. However, he doesn’t like to invest money in a long-term product. So, he bought a life insurance plan from a company that provided earning opportunities for his family. This will help to avoid financial losses when he is not alive.
Many options are available for new policy buyers when they want to select a life insurance plan from a company. Some of them include term insurance, guaranteed return products, and Unit Linked Insurance Plans (ULIPs). They provide ways to generate a consistent income with high returns and profits.
How do life insurance policies help policyholders deal with the COVID-19 impact?
Life insurance policies allow a policyholder to deal with COVID-19 impact in three different ways to ensure peace of mind. They include:
1. Term Insurance
A term insurance plan aims at protecting the insured and his or her loved ones from uncertainties for a certain period. It offers death benefits as well add-on coverage for a policyholder to gain more advantages. The plan is the most cost-effective solution for those who want to get a high sum assured amount at low premiums.
One of the main advantages of buying term life insurance is that it helps the insured’s family members to fulfill financial obligations in their absence. Not only that, term plans offer additional coverage for policyholders to witness complete satisfaction. Some of them include accidental death, critical illnesses coverage, and increasing income. In addition, having term life insurance makes feasible ways to receive lump sum monthly or annually to help manage expenses without any difficulties. Therefore, it is an ideal choice for those who want to get more protection from COVID-19 impacts.
Apart from that, joint-term insurance is suitable for couples enabling them to provide a better future for their children when both pass away due to illnesses or CoVID-19 effects. Moreover, the insurance plan is combined financial planning that helps reduce the financial burden to a large extent.
2. Guaranteed Return Products
Guaranteed return products come with insurance as well as guaranteed benefits. For example, the life insurance plan gives ways to get guaranteed returns when it gets matured. It is non-traditional insurance coverage that doesn’t disclose costs or investments. Anyone who wants to ensure cash flow at important future goals can select them, which gives ways to lower risks. They are ideal for loan repayments, higher education of a child, and other purposes to overcome mental worries and other problems.
A guaranteed return product offers a death benefit for a policyholder during his/her absence that will help secure the future of loved ones. It also gives ways to avail a loan against a policy during critical situations. In addition, the guaranteed return products offer endowment, regular income, and whole life income for policyholders to achieve their financial goals in life. They even provide add-on benefits to increase the protection.
3. Unit Linked Insurance Plans (ULIPs)
Unit Linked Insurance plans, shortly known as ULIPs, provide a dual advantage of insurance and investments. While they provide full life insurance coverage, a policyholder can also increase his income with high returns. They show ways to invest in equity funds, debt funds, or a combination of both that will help improve financial stability. Staying invested in a ULIP plan during the COVID-19 pandemic makes feasible ways to compound the interests to a large extent.
Besides that, the plan provides coverage for death due to Coronavirus. Another advantage of buying the plan is that it allows policyholders to switch between funds depending on the market condition. This, in turn, paves ways to generate higher returns and profits to ensure a steady income.
Having a ULIP policy lets policyholders withdraw the amounts partially during emergency situations. On the other hand, it is wise to watch the market conditions before switching to a plan that will help minimize risks. Moreover, since different types of ULIP plans are available in the markets, one should consider evaluating them with more attention before investing, which gives ways to gain more ideas.
The bottom line is life insurance plans are the best option for people to ensure maximum protection from unexpected events and critical illnesses such as COVID-19. To buy term insurance plans with the best prices, one should compare them online to meet the essential needs. In most cases, an insurance company will guide customers to find a plan with highly qualified teams while investing money. They should also calculate the premium rates of plans when buying term insurance online to help plan the future accordingly.
Managing finances during a pandemic involves several challenges, and investors should buy an insurance plan that protects savings. It even provides ways to grow wealth significantly to lower the financial problems caused by the pandemic. In addition, life insurance plans serve as a shield for those who want to lead a trouble-free life.