How Salary Protection Insurance Can Help You

Here is a new feature that most life insurers now offer: salary protection insurance.

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This is a term insurance policy that typically offers a regular income payout option along with a lump sum payment and is also known as income protection insurance.

While opting for such a term insurance policy, you can choose how to divide the total sum assured amount between the two components (regular income and lump sum) at the time of buying the policy. Those who are not investment savvy or want to choose lower but guaranteed returns can opt for the term policy with a regular income payout option.

Buyers, however, must know that it is a term policy without any maturity benefits. Only the nominee receives an assured death benefit-a lump sum amount-in the case of the policyholder's demise.

Akshay Dhand, the Appointed Actuary at Canara HSBC Life Insurance, said as per the terms of the salary insurance policy, regular payments are made to a nominee after the death of the insured for a given number of years.