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    What is term insurance with a monthly payout?

    Synopsis

    Term insurance with a monthly payout is particularly useful for families with limited financial exposure where there is a possibility of the lumpsum amount being mismanaged or squandered away.

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    The payout is exempt from tax for the beneficiary.
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    1. Some term insurance policies offer an option of selecting a monthly payout over a period of time instead of a lumpsum payout in case of death during the term.

    2. The monthly amount can be opted as a flat amount or with a percentage increment every year to adjust for inflation.

    3. The monthly payout is like a pseudo salary which comes every month for certain years.

    4. This payout is exempt from tax for the beneficiary.

    5. It is particularly useful for families with limited financial exposure where there is a possibility of the lumpsum amount being mismanaged or squandered away.

    (Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)
    (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
    The Economic Times