Term Insurance

Are there any term plans for adventurous people who go for trekking, cycling, mountaineering and so on?

Nov 16, 2021

Holidays have gone through a change in the recent decade. You would visit the beach or mountainside with family and enjoy the relaxing atmosphere. If you were so inclined, you may have visited historical monuments and sites. Fast forward to today. While relaxing family holidays are still common, more people are seeking out an adrenaline rush rather than relaxation. In a word, adventure sports have gained in popularity.

What does this mean for life insurance? Could term insurance plans cover adventure seekers? Read on to explore more on this topic.

The advent of adventure sports in India

There have always been those who liked trekking, cycling, racing, mountaineering, and so on. But they were often few and far between. A lack of knowledge, equipment, support, or opportunities was often blamed. But things have changed and how! Adventure sports of all kinds have become increasingly popular. A survey conducted by an online travel portal in 2018 showed a massive 178% increase in adventure activities from 2015 to 2018. Open social media and chances are you will see at least one friend partaking in an adventurous activity. Mountaineering, trekking, cycling, river rafting, and even bungee jumping have taken India by storm.

Adventure activities are no longer the bastion of the few. Paragliding, trekking, scuba diving, snorkelling, parasailing, and hot-air ballooning are just some of the activities people are enjoying. Today Manali is not only popular for its scenic beauty. People flock there for an opportunity to go paragliding. Rishikesh, once viewed mainly as a place of pilgrimage, now boasts of tourists visiting for its river rafting, parasailing, paragliding, cliff jumping, and more!

And thrill-seekers aren’t just youngsters but also the young-at-heart. Mohan Thomas, 47 years young as he says, has gone paragliding and hot-air ballooning. Next on the cards for him is scuba diving. And he’s not alone in this. The older generation is seeking adventure too. You can find them going on mountain treks, or river rafting, and more. 

The dangers involved

People would use holidays as a chance to relax. Now they are using it to chase the thrill of adrenalin. Tourist operators have realised how popular these activities are and so, you can find opportunities for adventure seekers all over the country. However, all is not rosy. Accidents can and do happen during these activities. Most tourist operators follow the set safety protocols. However, there may be a few unscrupulous and careless ones. It is of utmost importance that you choose a well-established and reputed adventure sports company. Research well and then make your choice. There are safety precautions that the tourists have to ensure for themselves. For example, when trekking on high mountains, they should be of reasonably good health to acclimate to low oxygen conditions. If not, they can get very sick and may even have an accident. 

Not all accidents are fatal. But they can be. This ends up with an unfortunate loss of lives and a thrilling memory becomes a tragedy. A loved one is lost leaving family members reeling in sorrow and often faced with financial uncertainties. This is where life insurance comes in. One of the most popular forms of life insurance is term insurance. 

What is term insurance?

Term insurance is the truest form of life insurance. The policyholder chooses a coverage period and pays the premium for the said period. If the insured person passes away during the coverage period, then their beneficiary will receive the guaranteed death benefit from the insurance company.

Why is term insurance popular?

Term insurance has become more popular in recent times. The Covid-19 pandemic has affected Indians in all parts of their lives. It has shown the importance of having life insurance in the first place. But life insurance can be an expensive proposition when earnings are affected due to the pandemic. People have lost their livelihoods. Businesses have been forced to close. Salaried people have been laid off. Others may have had their wages cut. In the meanwhile, loans, EMIs, daily expenses, and rent have all continued unabated. So how can a person afford life insurance protection when they have to pay for everything else? This is where term insurance comes in. It is by far, the most affordable type of life insurance available. Here are some reasons why term insurance is so popular:

Affordability: 
Perhaps the biggest draw for term insurance is that it is highly affordable. Among all life insurance plan types, term insurance plans have the lowest premiums. Other traditional life insurance plans such as endowment plans have the element of investment. Hence, they are more expensive. Term insurance being a basic form of life insurance offers low premiums in exchange for life coverage.

Buying early makes a difference: 
The earlier you buy term insurance the cheaper your premiums. If you want to really take advantage of low premiums, then buying term insurance when you are in your 20s will benefit you greatly. And the best part is the premium amount does not change throughout the policy period. So if you get in early, you will enjoy low premiums through the decades.

An example

Chaitali is 26 years old and is a young professional at the start of her career. She cannot afford to pay high life insurance premiums at the moment. So she chooses a term insurance policy where she has to pay mere Rs 5000 a year. This policy will give her coverage until the age of 75 years for an amount of Rs One crore. 

But suppose you missed the mark and are in your mid-30s; is term insurance still affordable? The short answer is yes. For the same coverage amount and period, a 34-year-old would have to pay Rs 11000 per year. This is less expensive compared to traditional premiums taken at the same age.

Tax benefits: 
Along with protecting your family’s financial future, you save tax with term insurance. 

  • Under Section 80C, you can claim a tax deduction of up to Rs 1.5 lakh on premium payments
  • Under Section 80D, you can receive a tax benefit on health-coverage riders such as the Critical Illness Rider
  • Under Section 10(10D), the Death Benefit that your beneficiary receives is completely tax-exempt

Choose your rider: 
No, this is not about motorbiking or any such activity! You can choose insurance riders that offer more coverage than a basic plan. Some such riders are

Accidental Death Benefit Rider: 


If the insured person passes away due to an accident during the coverage period, the beneficiary will receive an additional sum assured amount over and above the original sum assured amount. 

 

  • Accelerated Death Benefit Rider: 
    If the insured person suffers from a terminal illness, their family would have to bear heavy medical costs. This particular rider ensures that the family will receive a portion of the sum assured before plan maturity.

     
  • Accidental Disability Benefit Rider: 
    This rider is often combined with the Accidental Death Benefit Rider. If the insured person meets with an accident leaving them disabled, then the plan will pay them at regular intervals for the next five to ten years.

     
  • Critical Illness Benefit Rider: 
    Certain critical illnesses are covered under this rider. These are cancer, heart attack, stroke, paralysis, kidney failure, major organ transplant, and so on. The plan will pay the insured person a lump sum amount on a valid diagnosis of the critical illness. After the diagnosis and lump sum payment, the plan may either be terminated or will continue according to the terms and conditions.

Term insurance plans for adventure sports

Unfortunately, as term insurance is pure life insurance, it does not cover death caused by certain scenarios. These are self-inflicted injury, suicide, death through alcohol/drug overdose, riots, civil commotion, war, and adventure sports. The Accidental Death Benefit Rider and Accidental Disability Benefit Rider also do not cover disabilities and deaths that occurred during adventure sports. 

In conclusion

Do not dismiss term insurance completely; especially if you partake in adventure sports infrequently. Due to its various advantages afforded, it is still a good idea to invest in a term insurance plan. Avid adventure seekers may also invest in term insurance as well in another form of life insurance that specifically covers adventure sports.

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