Term insurance is a life insurance policy, which offers financial coverage to the policyholder for a defined period. In case of sudden demise of the insured individual during the policy term, the death benefit is paid by the company to the beneficiary. The primary purpose of term insurance is to provide financial security and stability to your loved ones against the loss of income that could arise due to unfortunate events.
The reason behind term plans becoming so popular again is that we have begun to acknowledge its ability to supply a financial security net at a reasonable rate of premium, which is useful for you and your family. The following are the many benefits of choosing a term insurance policy:
High Life Insurance Amount at Affordable Premiums:Term Insurance plans are a basic and straightforward life insurance product that provides a large and outsized amount of life insurance cover at a reasonable premium. It compensates for several years of lost earnings, offers financial security and protection for you and your loved ones, without burning a hole in your wallet.
Tax Benefits:Another massive advantage of term plans is that it offers tax benefits on premiums paid up to 46,800 under Section 80C and it furthermore offers tax break subject to conditions under section 10(10D) on the amount received by your family in case of any unfortunate events.
The Option to Add on Riders:Since everyone has different financial goals, priorities and lifestyles, one among the key advantages of term plans is that it offers riders as an in-built feature of the policy. Riders provide add-on coverage at a nominal cost and its benefits can be availed by paying an extra premium to the insurer along with the basic premium of the term policy. Some of these riders include accidental benefit, critical illness, partial or permanent disability.
Long-Term Protection for You and Your Family:While we all know life is unpredictable and in case of any uncertainty, our utmost priority is to make sure that our loved one's financial well-being is going to be taken care of. Choosing the right term insurance plan for a long-term perspective, however, ensures to protect your family from financial liabilities in case of any unfortunate events.
Among a ton of reasons to buy a term plan, here are the key and basic reasons why buying term insurance is a must:
The Dependency of Your Family Members:If you are an earning member of the family, more likely than not, you are responsible for the overall well-being of your spouse, parents and children, where term insurance plan is an investment you make today to secure your loved ones future in your absence. Term Insurance alongside financial security provides financial assistance to your dependents when you are no longer around and enables them to continue with their life without falling into a debt trap.
Massive Coverage, Low Premiums:The term insurance plans, due to the absence of investment element, maturity benefits and other complexities offer high coverage at relatively low premium rates. However, with an increase in age, your premium amount will also increase. You are perhaps healthy before hitting your 40s, and you are likely to have lower premiums as compared to someone well over 40. Though the tax component (Goods and Services Tax) may change as per prevailing tax laws and regulation laid by Government of India, the premium amount will not change during your policy tenure.
Provides Financial Security:Financial protection is the basic reason people opt for any kind of insurance plan and rightfully so. With term life insurance plans, you can always plan your financial future as it ensures adequate income in case of an untimely and unfortunate death. Term insurance plan helps cover financial liabilities that are required to be borne by the family, while they can live a comfortable life without any financial hardships even when you are gone.