Knowing The Difference Between Term Life Insurance And Disability Insurance

By Author: Nisha Scott
Total Articles: 2
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Buying an insurance policy is never easy, especially in India where you have a plethora of options to choose. A lot of Indians face trouble while choosing the right insurance cover for their family; most of them either do not understand the details of the plan or they do not know what cover do they need exactly. Often people end up buying an insurance that does not meet their needs or a policy that may not require at all. To ensure that you avoid buying the wrong insurance cover, it is advisable that you first know your needs.
You must ask yourself whether you need only a life cover or coverage for disability or both.

To know the difference between disability insurance and term life insurance policy, it is best advised to compare the benefits of both and make an informed buying decision.

Benefits of term life insurance policy

• Affordable Premium

One of main reasons why many people in India prefer buying term life insurance over other types of policy is that it has the most affordable premium. It is the most basic form of life insurance cover that provides the dual benefit of protection and returns on premium. You can get a coverage for 50 Lakhs with an annual premium of about 4500 Rupees.

• Secures the Family

One of the biggest term life insurance benefits is that it provides financial protection to your family even when you are not around. If you are the sole breadwinner in your family, a term life cover is a must have for you. In the event of any causality that leads to untimely death, the policy will pay the death benefit to the appointed nominee and help them meet the expenses without compromising on their regular lifestyle.

• Tax Benefit

Different insurance companies provide different types of term life insurance and irrespective of the type you have, the death benefit that your nominee may receive is subject to tax exemption.

• Convertibility

A lot of insurance companies in India allow the term life insurance policy holders to convert their existing policy to something else based on their changing needs; you can take an additional rider or increase your coverage amount. However, there may be certain restrictions in terms of conversion fees, time limit, and the converted amount. Make sure to read the terms and conditions carefully.

Disability Insurance

Disability insurance, as the term suggests is a cover against any form of physical disability or injury you may suffer that would lead to loss of income. In the event of any accident on road or at workplace, where you suffer from a partial or total disability, you will get payments from the insurance company to not just cover the medical expense but also for the loss of income. The cover can help you meet the financial obligations and maintain your lifestyle.

• One of the biggest disability insurance benefits is that it will help you keep your loved ones secure in the event of any mishap that may occur to you.

• If due to any accident, you become incapable or working for some time, a disability insurance cover can help you pay for the essential expenses

• Irrespective of the types of disability insurance you have, you get tax exemption on the premium you choose for the insurance cover.
Thus, in a nutshell, both term life insurance and disability insurance have their unique benefits. Know your needs well, and invest wisely. But, in general, if you can afford paying the premium, having both the cover is advisable.