What Are the Payout Options in Term Life Insurance?
You can opt for one of the following payout options for your term insurance policy:
1. One-Time Lump-Sum Payout
If you opt for this, your nominee will receive the entire sum due to them in a single payment. For example, if your sum assured is INR 2 crore, your nominee will receive the entire amount once their claim is accepted.
2. One-Time Lump-Sum Payment with Fixed Monthly Payouts
You may not want your nominee to receive the entire amount at once. You can opt for this option that provides a portion of the sum assured as a lump-sum payout immediately. The rest of the money is provided in monthly instalments over a few years. You can decide how long you want the monthly payments to continue when you purchase the policy. The sum assured amounts get divided equally depending on what you choose.
3. One-Time Lump-Sum Payment with Increasing Monthly Payouts
You can choose for your nominee to receive a lump-sum payout of the sum assured along with increasing monthly instalments for a specified period. The monthly sums increase every year for a specified term as decided by the policyholder when purchasing the plan.