Importance of Term Insurance In Today’s Life

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Term insurance is a contrasting life insurance policy that provides coverage at a fixed payment rate for a limited period. It is the most cost-effective way to purchase substantial death benefit coverage at a minimum premium. Term insurance acts as a protective cushion for the family in absence of the major earning member of the family. Term insurance guarantees a stable income for any beneficiary family member in case of an unfortunate episode of death. However, no benefit would be paid to the policyholder if he/she survives the policy period. Nevertheless, the plan term can be renewed which allows the insured to extend the period.

Eligibility Criteria

With advancements in online platforms, one can easily buy online term plan. Term insurance plans have certain eligibility requirements. People aged between 18 and 65 can avail the benefits of the plan. The maximum maturity age is 85 years for most of the policies. The policy period may range from 5 to 50 years. The monetary amount assured can range from 20 lakhs to 1 crore depending upon the time limit, the age of purchasing the policy, the premium payable, etc.

Why Should One Opt for Term Insurance?

  • With passing time responsibilities and dependencies increase. You can secure your spouse’s and children’s future against unforeseen events. It can help your loved ones with monthly expenses or during huge events like marriages and higher education.
  • People usually purchase expensive properties against loans. In case of your uncertain demise, your family can pay the loans with the cover of the policy.

Term Insurance Benefits

  • Cost-Effective

You will find term insurance to be economical as compared to other insurance plans. The nominal cost of premium against the coverage of financial family safety is of the least concern. The premium for term insurance is much lesser than any other life insurance policy. Altogether, the premiums are locked in the duration of the policy. The total premium calculated when you buy a term plan young is lower than when you purchase later in life. Thus, one can buy online term plan for a good sum assurance at lower payable premiums.

  • Rider Options

Term insurance provides interesting rider options like critical illness rider, accidental rider, and premium waiver which adds value and strength to the policy. For example, you can opt for a critical disease rider if you have any particular illness that need special care. This makes the person eligible for a monetary benefit from the company in case diagnosed with a critical illness as specified by the insurer. Waiver of premium waives off the payment of future payment in case of accident specified by the insurer. They are of considerate value while choosing a term plan.

  • Assured Sum and Tax Benefits

In case of the demise of the policyholder, the family gets an assured sum. The payout can be a lump sum amount, or an annual or monthly income. The coverage amount can assist the family to pay out liabilities or fulfill their expenses.

Term insurance offers tax benefits under Section 80C of the Income Tax Act. The policyholder can avail tax deductions of maximum 1.5lakhs for all the listed instruments. The instruments include PPF EPF ULIP ELSS.

Repayments like home loans, children’s tuition fees, and life insurance premiums are also included. Nonetheless, if the policy is surrendered before two years from the commencing, it will not be eligible for Section 80C benefits.

Term plans are also entitled to Section 80D tax benefits. Policyholders who are health-risk riders may avail tax exemptions of up to INR 25000.

Section 10(10D) of the Income Tax Act gives a completely tax-free assured sum on the demise of the policyholder to the beneficiary.

Conclusion:- 

Thus, you can buy online term plan and financial responsibilities like higher education, consumer debt, dependent care, or mortgages may be covered under this policy. It is vital to calculate your insurance needs carefully and select a coverage amount that would be adequate for your family to manage their expenses.