These benefits will make you buy term insurance today!
The best term insurance plan protects your family financially if you cannot provide for them. Term insurance plans are widely regarded as one of the essential forms of life insurance policies that can be purchased in the modern-day. Term insurance not only protects your family financially in the worst-case scenario but also gives tax benefits of term insurance. Not only that, but you may also take advantage of a variety of other advantages offered by term plans. Check out the benefits of term insurance listed below.
What are the Benefits of an Ideal Term Insurance Plan?
Let’s talk about the benefits of term insurance in detail.
1. High Sum Assured at Affordable Premium
A term insurance policy is a primary type of life insurance. One of the key benefits of term insurance is its low cost. When compared to other types of life insurance plans, a term insurance policy has a lower premium than you may quickly pay. Another significant advantage of the best term insurance plan is that the rate is reduced the earlier you get it.
Furthermore, getting the best term insurance plan online may result in a lower premium than obtaining it offline. In other words, the cost savings made by the insurer are passed on to you as one of the benefits of a term insurance plan. You may easily simply verify the term insurance advantages online.
2. Easy to Understand
You may find it challenging to grasp the insurance-specific terminology of numerous life insurance policies while purchasing a life cover. One of the most appealing aspects of term insurance policies is their simplicity.
A term insurance plan, being a pure life insurance policy, does not include an investing component. You pay the premiums, and the insurer insures your life for a certain period to provide the benefits of term insurance.
3. Multiple Death Benefit Payout Options
You may be paying the EMIs on a new home, a car, or a personal loan. Your financial obligations may be passed on to your family members in your absence. Here, the numerous payout choices of a term insurance policy come into play.
In the event of your untimely death, your dependents may receive a lump sum payment to assist them in managing their previous financial commitments.
Some term insurance plans also allow you to receive a monthly income in addition to the lump sum amount as the death benefit. Your family may find it simpler to manage recurring costs with this monthly income.
4. Additional Riders to Strengthen the Policy
Term insurance policies have riders that can be added to the standard term insurance coverage. You may add these riders to your term insurance policy by paying a small extra cost.
5. Income Tax Benefits
Term insurance programmes also offer tax advantages. While the premiums you pay for a term insurance plan are tax-deductible, the payouts are likewise tax-free under current tax legislation.
Term Insurance Benefits under Section 80C
The premium you pay to obtain a term insurance plan is tax-free under Section 80C of the Income Tax Act of 1961, up to a limit of Rs.1.5 lakh per year. Under this section, you may get the most out of your term insurance tax advantages by choosing the plan with the most coverage available to you, depending on your age and health.
Term Insurance Benefits Under Section 10(10D)
According to Section 10(10D) of the Income Tax Act of 1961, the death benefit of term insurance policies is exempt.
6. Critical Illness Coverage
You can have catastrophic diseases at any point in your life, and acquiring the necessary care might deplete all of your funds. Although the core benefits of term insurance policies are solely life insurance, you may add critical illness coverage by purchasing add-ons/riders.
7. Accidental Death Benefit Coverage
Accidents may occur at any time and can result in death or dismemberment.
Term insurance protects your family’s financial future in the event of accidental death or dismemberment. This rider can be added to your term insurance policy to give additional benefits of term insurance or coverage in the event of an accident resulting in death or dismemberment. As part of the advantages of a term insurance policy, the sum guaranteed is paid to the recipient in a lump payment. You can add the rider at any time, as long as the base policy’s remaining policy term is at least five years.
To receive the advantages of a term insurance plan rider, you can add it when purchasing the policy or after that. Also, before you include riders in a term insurance plan, you must grasp the coverage benefits of each one.
8. Return of Premium Option
A pure term insurance policy solely offers life insurance to the beneficiary in the event of the life insured’s an untimely death. It provides no advantage in terms of maturity. However, if you choose the return of premium option, you can get a maturity benefit under a term insurance policy.
This choice will require you to pay more significant premiums, but if you survive the policy’s duration, you will receive a refund of the whole premiums paid. However, the total premium amount to be repaid excludes any taxes, levies, rider premium, and modal amount spent on the premium.
Nowadays, you may simply estimate the premium of a term insurance plan with or without maturity benefits using an online term plan calculator. It will assist you in making a sensible selection based on your financial requirements.
Why Choose a Term Insurance Plan?
Based on your lifestyle, you may assume that nothing untoward would happen to you. However, there is always the chance of early death due to external events such as accidents or sickness, which are beyond your control. Purchasing term insurance is critical because it helps your family reduce the financial burden that they may suffer in your absence.
Wrapping It Up
There are many different types of term insurance policies available on the market, each with its own set of advantages. However, it would be preferable if you did not take a one-size-fits-all approach when contemplating the benefits of term insurance.
You should obtain enough life insurance coverage depending on your financial responsibilities and pick appropriate add-ons based on the type of coverage you require. Before you purchase a term insurance policy, ensure that you know and comprehend the numerous aspects of obtaining term insurance plans online or offline.
As a general guideline, get term insurance with a coverage amount equal to at least eight to ten times your yearly salary. For example, if you now earn Rs. 5 lakh per year, you should choose a life cover of Rs 40 – 50 lakh or more to maximize the benefits of term insurance plan.
Use our online term insurance calculators to calculate your term insurance rates.