The global COVID-19 pandemic is one of the biggest crises the world has ever witnessed. During the pandemic, even the mightiest of the economies suffered huge losses, several businesses shut down, and millions of people lost their jobs or received a pay cut. On the other hand, medical expenses continued to rise significantly. This has made one thing clear – you need to adopt a failproof financial planning process to ensure you survive such a crisis effectively.
One of the most important elements of the financial planning process is to create a supplementary income plan. Having a secondary income source can help you manage your expenses during financially crunched situations, such as job loss, significant salary cut, business loss, etc. The best way to secure an alternative source of income is by investing in a regular income plan.
Here is everything you need to know about the importance of a supplementary income plan with insurance in a post-pandemic world:
What is a regular income plan with insurance?
A regular income plan, also known as an online income builder plan, is a special type of insurance policy that gives you comprehensive insurance cover along with a regular income source.
This means that in case of your unfortunate demise during the policy tenure, the regular income plan will pay a defined lumpsum amount, in the form of a death benefit, to your family.
Apart from this, the plan gives you an option to receive your returns in the form of regular monthly income payouts during the course of the policy to supplement your primary income source.
What is the role of a regular income plan with life insurance in a post-pandemic world?
The COVID-19 pandemic has been raging on since 2020, leading to a rise in medical expenses and a loss of income for millions of people in India. The pandemic has redefined the need of financial security, and it is wiser for you to upgrade your financial planning process to include more up-to-date options like a regular income plan with life insurance.
Traditional insurance policies have always been an important part of a financial plan. However, the global pandemic has made the importance of insurance coverage even more pronounced. Especially, life insurance that also acts as a secondary source of income is ideal for dealing with the financial instability in and post the COVID-19 era.
Here are some of the top benefits of a regular income plan:
- Protection: Coronavirus has caused millions of deaths, leaving several families financially struggling to keep up their standard of living after the loss of their primary breadwinner. However, with a regular income plan that also offers insurance protection, you can be at peace of mind, knowing that in case of an unfortunate event, your loved ones will not be financially strained.
The life cover payouts offered by the insurance policy will help them fulfil their living expenses and maintain their standard of living. Moreover, they could use the funds to achieve their financial goals, such as funding the education of your child, sponsoring the marriage of your children and more. Your family can also use the money to pay off any outstanding debts.
- Supplementary income source: Apart from causing a health scare, the COVID-19 pandemic has also led to a loss of livelihood for many. In such a scenario, having an alternate source of income always helps. With the regular income plan, you can opt to receive your insurance returns in the form of a lump sum or as regular payouts according to a frequency of your choice.
This helps you ensure that the pandemic does not financially crush you. In case you lose your job or experience a pay cut, you can use the regular income payouts to pay for your child’s education, meet healthcare expenses, pay your loan instalments, cover your everyday living expenses and do much more.
- Tax benefits: Apart from securing your family in your absence and helping you cope with the financial difficulties through a reliable income stream, a regular income plan also gives you tax benefits. The premiums you pay for the regular income plan are exempt from taxes under Section 80C. Moreover, the death benefit received by the family is also exempt from taxes under Section 10(10D).
Additionally, the regular income payouts that the plan offers also enjoy tax exemption under Section 10(10D). This helps you reduce your taxable income and ultimately your tax liability, enabling you to have more disposable income at hand.
Apart from offering these major benefits, you can also enhance the insurance coverage of your regular income insurance plan. Typically, these plans allow you to opt for riders, such as critical illness benefit, accidental total and permanent disability rider, income benefit rider, waiver of premium rider and more.
When you opt for a rider, such as a critical illness rider, you create a failproof financial plan for uncertainties like the COVID-19 pandemic. Such riders give you a lump sum benefit if you are diagnosed with a listed critical illness and also waive any further premiums. Moreover, the regular income stream helps your family cover their expenses while you are recovering from your illness.
Edelweiss Tokio Life Insurance Income Builder Plan
Trust Edelweiss Tokio Life online income builder plan to help you create a financial safety net for your future. The income builder plan offers comprehensive insurance along with an option to create a reliable supplementary income stream for uncertain times. The plan comes with affordable premiums, competitive features, utmost flexibility, tax benefits and a wide variety of riders, enabling you to create a strong financial shield for the post-pandemic world.
The global pandemic is a wake-up call for everyone to realise the importance of financial planning. Choose the best regular income plan that can provide you with the much-needed supplementary income as well as a secure insurance cover for your family. It is wiser to be prepared for all types of uncertainties in the post-pandemic world, with Edelweiss Tokio Life – Income Builder.
Aastha Mestry - Portfolio Manager
An Author and a Full-Time Portfolio Manager, Aastha has 6 years of experience working in the Insurance Industry with businesses globally. With a profound interest for travelling, Aastha also loves to blog in her free time.