Risk Cover Policy in Insurance: Meaning, Types & Benefits
let’s break down the concept of risk cover in insurance, its types, and the key benefits, especially when you choose a thoughtfully designed plan like Aviva Signature 3D Term Plan – Platinum from Aviva India.
Life is unpredictable. While we cannot control what happens next, we can prepare for it. One of the simplest ways to secure your family’s financial future is through a Term Life Insurance plan. This type of insurance policy ensures that your family doesn’t bear the financial burden of an unfortunate event, such as the sudden demise of the primary breadwinner.
In this post, let’s break down the concept of risk cover in insurance, its types, and the key benefits, especially when you choose a thoughtfully designed plan like Aviva Signature 3D Term Plan – Platinum from Aviva India.
What is a Risk Cover Policy in Insurance?
A risk cover policy provides financial compensation to the policyholder’s nominee in case of an unforeseen event such as death or critical illness during the policy term. It doesn’t offer returns like investment plans, but it guarantees peace of mind. You pay a premium regularly, and in return, your loved ones receive a lump sum amount (called the Sum Assured) if the covered event occurs within the policy term.
The most common and cost-effective form of risk cover is Term Life Insurance, which offers a high sum assured at affordable premiums.
Types of Risk Cover Policies
Risk cover plans aren’t one-size-fits-all. Depending on individual needs, insurers offer different types of policies. Here are the two major categories under the Aviva Signature 3D Term Plan – Platinum:
- Life Protect Option: This option provides a uniform cover throughout the policy term. If the insured person passes away during the policy term, the nominee receives the full Base Sum Assured, and the policy terminates. If the person survives the term, no payout is made.
To increase protection, riders such as Accidental Casualty, Critical Illness, and Cancer Cardio can be added for additional coverage.
- Credit Protect Option: This variant is designed for people with outstanding loans. It ensures your family doesn’t get burdened with repayments if something happens to you. The cover amount reduces each year in line with a pre-defined schedule, reflecting your loan balance. While this option doesn’t offer riders, it’s a smart way to protect against liabilities.
In addition to these, Aviva India offers other excellent plans, such as the Aviva Signature Increasing Income Plan and the Aviva Signature Investment Plan – Platinum.
Benefits of Term Life Insurance
Let’s look at the broader advantages of opting for a Term Life Insurance plan:
- Complete Financial Security
It offers a high sum assured at a relatively low cost, helping your family maintain their lifestyle and meet major expenses even in your absence. - Flexible Premium Options
You can choose between single, yearly, half-yearly, quarterly, or monthly payments, depending on your financial preferences. - Long-Term Protection
Coverage can extend up to the age of 80 years, which means your family remains protected through most of life’s uncertainties. - Special Premium Rates
Female applicants and non-tobacco users get special premium rates, offering significant savings over the policy term. - Customisation with Riders
Options to add riders enhance the protection against accidental death, critical illness, or specific diseases, providing a holistic cover. - Option to Buy Under MWP Act
This ensures that the claim amount is paid directly to your wife or children and cannot be claimed by creditors—an added layer of financial security.
Aviva Signature 3D Term Plan – Platinum
The Aviva Signature 3D Term Plan – Platinum is a Non-Linked, Non-Participating Pure Risk Life Insurance Plan that goes beyond traditional financial protection. It includes a Preventive Wellness Package, ensuring your health is safeguarded while also providing peace of mind and financial support for your loved ones. Flexible premium rates are available, along with special discounts for women and non-tobacco users.
Why should you buy it?
- Complete financial protection for your family.
- Two plan options (Life Protect and Credit Protect) to suit your needs
- Flexible premium payments (Single, Yearly, Half-Yearly, Quarterly, or Monthly)
- Additional protection with riders (Accidental Casualty, Critical Illness, Cancer, Cardio)
- Life coverage up to age 80
- Special premium rates for women and non-tobacco users
Aviva Signature Increasing Income Plan
As life expectancy rises and the number of non-earning years increases, it’s essential to secure a stable income for the future. The Aviva Signature Increasing Income Plan provides a guaranteed, lifelong increasing income to meet rising expenses, ensuring your income keeps pace with inflation and offers long-term financial security.
Why should you buy it?
- Lifelong guaranteed monthly increasing income
- Death benefit protection for your beneficiaries
- Premium guarantee benefit in case of demise
- Additional coverage through accidental death or critical illness riders
- Tax benefits under Sections 80C and 10(10 D) of the Income Tax Act
Benefits:
- The maturity benefit of guaranteed monthly income
- Income increases by 15% every 3 years
- Lump sum of future benefits at a discounted rate
- Loan benefit and policy revival option
Aviva Signature Investment Plan – Platinum
For those seeking to grow their wealth while securing their family’s future, the Aviva Signature Investment Plan – Platinum is a Unit Linked Insurance Plan (ULIP) that combines both security (Sum Assured) and growth (Fund Value). It gives you control over your investments and protects your family in the event of unforeseen circumstances.
Why should you buy it?
- Flexibility to manage your investment
- Retirement protection with the RetireSafe feature
- Additional investment opportunities through top-up premiums
- Multiple investment options to match your goals
Benefits:
- Maturity and death benefits are based on the accumulated fund value
- Partial withdrawal flexibility after 5 policy years
- Systematic Transfer Plan (STP) to reduce market volatility risks
- Policy revival option and liquidity through partial withdrawals
Understanding Term Insurance Tax Benefit
For instance, Ankit, a 35-year-old professional earning ?12 Lakh per annum, buys the Aviva Signature 3D Term Plan – Platinum with a yearly premium of ?25,000. Under Section 80C of the Income Tax Act, his premium qualifies for a deduction of up to ?1.5 Lakh, lowering his taxable income to ?11.75 Lakh and saving him around ?7,500.
However, if Ankit invests in a ULIP, he can benefit from tax-free maturity and death benefits under Section 10(10D), provided the total annual premium does not exceed ?2.5 Lakh.
*As per Section 10(10D), maturity and death benefits from ULIPs remain tax-free only if the total annual premium does not exceed ?2.5 Lakh, as per the Finance Act 2023 amendments.
That’s how a term insurance tax benefit goes beyond saving money—it helps secure your future, too.
Who Should Opt for a Risk Cover Policy?
- Young professionals wanting to lock in low premiums for high coverage
- Newly married individuals who are planning to start a family
- Home loan borrowers looking to protect their family from liability
- Single-income households where the sole breadwinner’s absence can disrupt the financial balance
- Business owners with debts or dependents
A risk cover policy isn't a product you buy just for compliance or tax savings—it's a decision rooted in love, responsibility, and foresight. When chosen wisely, it ensures that your family’s dreams don’t end if your journey does. Whether you're just starting your financial planning or reviewing it mid-career, a comprehensive Term Life Insurance plan is the assurance your future self will thank you for.
Start protecting what matters most. Choose smart. Choose security.
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**Tax benefits are subject to change in prevalent tax laws.
***Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.
****Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
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