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:
Term insurance plans offer essential and uncomplicated life coverage, delivering substantial protection at an affordable premium. They make up for years of potential lost income, ensuring financial security for you and your family, all while being budget-friendly.
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.
Due to diverse financial goals, priorities, and lifestyles, a notable term plan advantage is its built-in riders. These extra coverages are cost-effective, offering benefits through added premiums alongside the base policy cost. Riders include features like accidental benefits, critical illness, and partial or permanent disability.
While we all know life is unpredictable and in case of any uncertainty, our utmost priority is to make sure that our loved ones 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:
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.
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.
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.
Quick answers to common questions.
What is a Term Insurance plan?
Term insurance is a type of life insurance, which offers financial coverage to the policyholder for a defined period. In case of the 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.
What is the minimum and maximum age to buy a Term Insurance policy?
The minimum eligibility age is 18 years and the maximum ranges between 65-69 years.
How much risk cover should I buy?
Your term cover primarily depends upon your annual income, including the number of dependents, investment requirement, affordability and the lifestyle you wish to provide to your family. However, the general thumb rule says that your risk cover should be 10-15 times of your annual income and can go up to 25 times for younger age policyholders.
Does Term Life Insurance Cover COVID-19?
All term insurance plans cover COVID-19 death claims.
Is it possible for an NRI to buy a Term Insurance policy?
Yes! Today, The Foreign Exchange Management Act (FEMA) allows Non-Resident Indian to purchase term insurance plans that would fulfil their requirement, secure the future of their loved ones and provide financial security in their absence, irrespective of them currently residing in India or not.
Registration ID: CA0690ISNP
Permission Ref: IRDAI/INT/ISNP/2021/97
Dated: 02/07/2021
