The current situation of the world has changed the way we lead our lives. Times like these, reiterate the importance of adequate life insurance coverage in one’s life. Apparently, it is never too late for you to secure the financial future of your loved one, especially if anything were to happen to you. All you need is a term insurance plan.
So, what is a term plan?
Ideally, a term insurance policy is the most affordable kind of life insurance product available in the market. The plan provides a lump sum amount to your dependents in case of your untimely demise. Moreover, insurers in India allow you to enhance the coverage of your term insurance plan with rider benefits.
Overall, term insurance in India is one of the widely popular insurance policies to secure the future of your family. In this section, we will be discussing in elaborate details why you need a term insurance cover. So, let us begin.
Benefits of Term Insurance Plans in India
The following are the term insurance benefits that make it a worthy insurance product.
- It is affordable
As mentioned earlier, term insurance is the most affordable life insurance product available in the market. The policy offers a high sum assured coverage at low premiums. The term insurance premium is determined based on several factors such as the coverage you opt for, your current medical condition, your age, your job, etc.
Hence, it advisable to buy term insurance at an early stage in life. You can use the term insurance premium calculator to determine the amount you will have to pay for the needed coverage.
- It offers rider benefits
To enhance the scope of the policy, insurers offer rider benefits. A few term insurance rider benefits that you can consider opting for include –
- Critical illness benefit
- Return of premium benefit
- Accidental death benefit
- Waiver of premium benefit
But remember that each rider benefit you opt for will increase your term insurance premium amount.
- It offers death benefits
If you are looking for an insurance plan to cover your family’s future finances and aspirations, a term plan is an ideal choice for you. A basic term insurance plan offers death benefits to the beneficiaries in the event of your dismissal during the policy tenure. So, your loved ones will be able to go on with their lives, even if you are not there to take care of their needs.
- It can offer maturity benefits
Many insurers in India offer the return of premium facility along with a primary term insurance plan. With this feature, you will be able to receive the premiums paid towards the term plan at the end of the tenure.
If you outlive the policy, the insurer is liable to repay the premiums as maturity benefits. So, to avail term insurance with maturity benefits, it is vital to have the return of premium benefit taken beforehand.
- It has tax benefits
Much like any other insurance product, term insurance plans have certain tax benefits as well. The premiums paid towards the term plan can be claimed for tax deductions under Section 80C of the old income tax regime. The maximum amount that can be claimed under this section is INR 1.5 Lakh, and it is inclusive of all the other investments you make over the year.
Also, the maturity or death benefits received on the policy are tax-free under Section 10(10D) of the Income Tax Act of 1961. People who have opted for the critical illness benefit along with their term insurance plan are liable to claim additional tax deductions of INR 50,000 under Section 80D.
Over to You
Before you proceed to buy a term insurance plan, it is recommended to evaluate your current financial situation, expenses, and future financial goals. These factors will help you choose the right term plan to fulfil yours and your family’s financial needs.