Life insurance is often thought of as a one-dimensional single pay-out. “When I die, my beneficiary will receive a lump-sum”. In reality, when used to its full potential, life insurance can provide a whole range of benefits. Of course, a multi-purpose policy needs careful consideration and expert advice like any other to ensure that it is the right choice for you and your family.
Essentially, a multi-purpose life insurance policy provides the benefits of a range of disparate policies in one. It can be extremely useful in providing for a whole range of potential outcomes. Premiums are payable for the duration of the policy. Upon its maturation, depending upon the policy, the insured could receive either a lump sum, a monthly pension or choose to have his beneficiaries receive an increased lump sum upon his death.
Because the policy is designed to be flexible, it could either be geared towards pension income or, in the fashion of an annuity or an endowment, be designed to pay out for a child’s education or wedding costs.
Should the policy holder die before the term is up, multi-purpose life insurance provides a regular monthly income for the duration of the unexpired term, and an additional monthly income for the two years following the policy holder’s death.
The beneficiaries also receive part-payment of the sum assured at the time of death, and payment of the full balance at the end of the selected period.
A multi-purpose policy can provide you with a supplement to your pension or financial help to your loved ones should you pass away. It can also provide a financial fillip to your children should they wish to go on to further education or tie the knot in the future.
Its flexibility is its strength, and if you’re looking for a product to tick multiple boxes, it’s well worth looking into.