What is the life stage benefit in term insurance?
A term life insurance coverage can protect you from the pitfalls of life. It provides for your family's financial requirements in the event of a tragedy. It ensures that your nominees will get a payment in the event of your death, which they can use to cover their expenditures. Throughout the policy term, the sum assured remains the same. However, if your duties and responsibilities grow, so will your costs. Aside from that, you must account for market inflation as well as rising costs of goods. As a result, a sum guaranteed today may not be adequate ten-fifteen years later.
The life stage benefit operates on the principle that "one size does not fit all," i.e., your term plan's initial coverage cannot cover all of your life stages. The life stage benefit option gives your life insurance policy more flexibility to match your changing needs. This one-of-a-kind term insurance benefits allows your insurance coverage to adjust to your life goals by increasing the sum assured at critical junctures depending upon the features of the policy.
Why does your life insurance need change at every stage in life?
Life insurance policies are designed to cover both long and short-term objectives. Life insurance requirements for larger responsibilities are often higher than those for smaller, short-term objectives. As time goes on, the duties/liabilities grow, and the sum assured that you chose years ago, when the situation was completely different, begins to feel insufficient.
As an example, as a recent graduate, you buy a term insurance policy. For the time being, your coverage will be more or less adequate. You eventually settle down and begin looking for a home to purchase. After a few years, you'll be responsible for your children's upbringing and education. You'll have to pay for their further education later. As a result, the original sum assured would most likely be insufficient to cover all of these costs. As a result, each period of life has its own set of insurance requirements.