Keeping your family secure and financially stable can be one of your most preoccupying and consuming tasks. However, it does not have to be that way if you are protected by a reliable term plan. It can provide a sense of certainty for your family’s future and is affordable and practical to include in your portfolio. If you are wondering how exactly term insurance can help you protect your loved ones, keep reading to know more about its benefits.
What is Term Insurance?
Term insurance, or a term plan, is a pure life insurance product that provides life cover to the policyholder(s) for a sum assured. It is the most uncomplicated of all life insurance policies and also the easiest to understand. The policy has a certain period, or term, for which it is valid. If the policyholder meets an untimely demise during this period, the nominees are entitled to a payout that can help them navigate the tough financial times.
Term plans can be bought both online and offline, with both modes offering different advantages to the customer.
How does Term Insurance Benefit you?
With a term insurance policy, you can protect your family by getting a financial settlement in case of death. This is especially useful if you have a large family to look after, some future expenses you would want to take care of in your absence, or some current liabilities whose burden you wouldn’t want falling on your family’s head.
Moreover, term insurance is important because it can help you out in case of a critical illness or accident.
Advantages of Term Insurance in India
- Economical: Term Plans are the most affordable life insurance products on the market today. The best thing is that the premiums you purchase the policy at are locked for the entire policy term, which can be advantageous if you buy the policy early in life. You can lock super-low premiums and get the amazingly high sum assured for it.
- Easy To Get: Term Plans are very simple to get (to understand and also to buy). Since they are basic products without any bells and whistles, it is easy to understand the purpose they serve and the way they work. You pay a yearly premium for a fixed number of years and enjoy life cover for a sum assured. In case you meet an untimely demise, your nominees get a payout. These are also easy to buy both offline and online. Although getting a term plan online is cheaper, getting one offline can also benefit you in many ways.
- High Death Benefit: Generally, the sum assured offered by term plans is on the higher side, and combined with the low premiums, makes it a very value for money option.
- Spouse Option: You can add a secondary policyholder to the plan, and they can enjoy 50% of the sum assured.
- Tax Benefits: A term plan’s premiums (up to ₹1.5 lacs) are exempt from taxation under section 80C, and the death benefit is exempt from taxation under section 10D of the Income Tax Act of 1961.
- Additional Riders: Most companies offer lucrative riders, which are essentially add-ons for your policy that can significantly enhance the scope of your term plan. These include a return of premium rider, a critical illness rider, and an accidental death benefit rider. Note that the addition of these riders results in an increase in the premiums but is generally worth it.
How to choose the right term plan for you?
Before you take out a term insurance policy, you should research and decide on the coverage amount you want. Then, find a term insurance plan with a good claim settlement ratio. Moreover, look for a term insurance plan with a low premium payment and a high coverage amount. Finally, you would need the right term of the policy so that you are insured for the entire period you are earning.
You can also add certain Riders to the plan and even add a secondary policyholder, like a spouse or a child, to the plan. Make sure to utilize the free look period after purchasing the policy and going through the fine print to ensure that this policy is absolutely perfect for you.
As you can see, term insurance is a crucial financial product that can protect your family against major financial issues and help you secure their future in your absence. All you ought to do is ponder and choose the correct term plan for you and enjoy the benefits of term insurance! Now that you know what term insurance is and how it benefits you, it’s time to start researching various term plans in India.
To begin comparing, you can use a Term Insurance Premium Calculator online. These are free tools that can estimate the premiums you will be required to pay by taking your basic details into consideration. Start searching today!