- Steady income for your family
- Available at affordable premiums
- Hassle-free purchase process
What is Income Replacement Insurance?
An income replacement term plan is an insurance product that offers guaranteed income as lumpsum or periodic installments in case of the policyholder’s demise. It is an ideal plan for those individuals who want to secure their family’s financial future with a monthly income. In case of the policyholder’s demise, the sum assured is divided into two parts. One is paid as a lump sum amount and the other as regular income for a specific time. The income helps your loved ones sustain their livelihood without any worries.
You must buy this plan if you are the sole breadwinner of your family so that your family does not face any financial issues in the future. This article provides you with complete information about the best income replacement plans, their benefits, and who should buy them.
Best Income Replacement Term Plans
Here is the list of the best income replacement term insurance plans:
| Name of the Plan | Entry Age | Maximum Maturity Age | Policy Term | Annual Premiums |
| ICICI Prudential iProtect Smart Monthly Income | Min- 18 years Max- 65 years |
75 years | 80- Age at entry | Rs 7,357 |
| Canara HSBC Life’s i-Select Star Term Plan | Min- 18 years Max- 65 years |
80 years | 62 years or 99-Entry Age | Rs 6,767 |
| HDFC Life Saral Jeevan Bima | Min- 0 years Max- 65 years |
85 years | 5 to 20 years | Rs 12,121 |
| Bajaj Allianz Life Flexi Income Goal | Min- 0 years Max- 55 years |
80 years | Premium payment term + 12 years to 25 years | Rs 13,068 |
| SBI Life Shubh Nivesh | Min- 18 years Max- 60 years |
65 years | 5 to 30 years | Rs 1,49,300 |
The above premiums are for a 32-year-old male for a sum assured of Rs 50 lakh.
How Does the Income Replacement Plan Work?
Let’s understand how an Income Replacement Plan works with a simple premium illustration.
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Problem
Mr. Sharma was looking for an income replacement plan that offers their family a steady income even in his absence so that they do not suffer financially. -
Solution
Mr. Sharma chooses ICICI Prudential iProtect Smart Monthly Income from PolicyX.com which offers a monthly income to his family even in his absence.
| Age of policyholder | Annual premiums | Policy tenure | Premium payment term | Total premiums paid | Basic sum assured | Income Period | Monthly Income |
| 35 years | Rs 22,331 | 40 years | 10 years | Rs 2,23,310 | Rs 1.5 crore | 10 years | Rs 1,25,000 |
After Mr. Sharma’s death, his policy ensures a monthly income of 1.25 Lakh for 10 years to his family.
Benefits of Income Replacement Term Plan
Here are some of the benefits of the Income Replacement Term Insurance Plan:
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Financial protection for your family
An income replacement plan offers financial protection to your family when they require it the most. If you are the sole breadwinner of the family you must buy this plan to ensure a steady income stream for your family. -
Affordable premiums
The premiums of Income replacement plans are very affordable. Along with the principal amount the insurer offers you an extra amount for staying invested. -
Tax benefits
If you buy an income replacement term insurance plan you get income tax exemptions under Section 80 C and Section 10 (10D) of The Income Tax Act. -
Hassle-free buying process
The purchase procedure of the income replacement term plan is simple and hassle-free. You have to do a little paperwork to buy this plan. -
Peace of mind
Buying an income replacement plan gives you peace of mind that your loved ones are financially secure even in your absence.
Who should buy an Income Replacement Term Insurance?
The following people must buy an Income replacement plan:
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Individuals who have dependents
An individual who has dependents must buy an income replacement plan so that their dependents are financially secure even in their absence. -
Sole breadwinners of the family
If you are the sole breadwinner of the family you must buy an income replacement plan so that your family is protected even in their hardest times. -
Single parents
If you are a single parent you must have an income replacement plan so that your child does not suffer financially even in case of your unfortunate demise. Your children can seamlessly pursue their future goals if you have an income replacement plan. -
Individuals who have outstanding debts
Those individuals who have outstanding debts must have an income replacement plan so that their family members are not burdened financially with their debts.
Why should you opt for an Income replacement plan?
If you want a steady income for your family in case of your unfortunate demise then you should buy an Income replacement plan. It offers guaranteed income to your family as per your chosen frequency. Your family can use this amount to sustain their livelihood and fulfill their future goals such as child education, marriage, buying a home, etc. You will get peace of mind as your loved ones are secure even in your absence.
Conclusion
You must buy an income replacement term insurance plan if you are a single parent, you have dependents, you have ongoing loans, etc. It keeps your family financially stable and secure even in your absence with a steady income stream. We have also provided you with a list of the best income replacement plans that you can choose from. If you are still confused about which income replacement plan is right for you then you can contact us at PolicyX.com. One of our insurance representatives will contact you shortly and help you choose a plan that best fits your requirements.
Income Replacement Term Plan: FAQs
1. What is the Income Replacement Term Plan?
An income replacement term plan is an insurance product that offers guaranteed income as lumpsum or periodic installments in case of the policyholder’s demise.
2. What are some of the best Income replacement insurance plans?
Some of the best income replacement term plans include ICICI Prudential iProtect Smart Monthly Income, Canara HSBC Life’s i-Select Star Term Plan, HDFC Life Saral Jeevan Bima, Bajaj Allianz Life Flexi Income Goal, SBI Life Shubh Nivesh.
3. What are the benefits of buying an income replacement plan?
There are various benefits of buying an income replacement plan including financial protection for your family, tax benefits, peace of mind, hassle-free purchase, etc.
4. Can I choose additional rider benefits with my income replacement plan?
Yes, you can avail of additional rider benefits with your income replacement term plan.
5. How to buy an Income Replacement Term Insurance Plan?
You can buy an Income replacement term plan either from the official website of the insurer or PolicyX.com.
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Written By: Himanshu Kumar
Himanshu is a seasoned content writer specializing in keeping readers engaged with the insurance industry, term and life insurance developments, etc. With an experience of 2 years in insurance and HR tech, Himanshu simplifies the insurance information and it is completely visible in his content pieces. He believes in making the content understandable to any common man.
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