Today, you may be earning a decent income. Income that supports your family and has the capability to do so in the future. But what if your family suddenly doesn’t have the luxury of that income? Assume that your family is bereft of your income. How will your family sustain itself? Have you thought of income insurance? If no, read on.
What is income insurance
Income insurance or income replacement insurance is a life insurance policy that you take to ensure that even if something happens to your income-earning potential, your family will have a financial support to fall back on. In what circumstances is income insurance useful? The answer is:
1. When you meet with an unfortunate and untimely demise, and
2. When you fall critically ill and unable to work and earn income.
An untimely demise
When you meet with an untimely demise, your family is left grief-stricken. To add to it will be the financial burden that they will have to face, especially if you do not have a working spouse. There are EMI’s to be paid, school fees to be submitted, household expenses to be met apart from the funeral costs. All this will burden your family further. If you have an income insurance like a term insurance plan, your family will have a financial back-up and they will not be left to fend on their own.
A critical illness
Let’s assume that you suffer a stroke and it is going to take 6 months to an year for you to recover fully and get back on your feet. Your employers may not be able to give you a paid leave for that time. In such a scenario, even if you have a mediclaim, how will you manage the expenses like school fees, EMI’s etc that a mediclaim would not help you with? For this an income insurance like a critical illness plan is necessary. This plan sees to it that in the event of you being diagnosed with a critical illness, you get a lumpsum amount that will help you tide over the financial disruption that the illness has caused.
To tide over the financial crisis that is the consequence of a sudden event, income insurance is something that you just cannot do without. It is something that will give your family the reassurance that they are not going to be left alone without any financial back-up when faced with the prospect of living without your income’s support.