We all have a number of financial goals that we need to fulfil in our lifetimes. A step in the right direction would be to build a financial strategy that can help you meet those goals. However, life can be unpredictable, and the untimely demise of the breadwinner can jeopardise your plans and expose your family to a huge financial risk. While no amount of money can bring back your loved ones, a term policy can help your family get back on their feet in your absence.
Term policy is a pure life insurance cover that secures your family’s financial wellbeing even when you are no longer there to provide for them. They come equipped with multiple features and benefits at an affordable premium to provide comprehensive coverage.
Benefits of Term Insurance
Let us discuss some term insurance benefits to help you make an objective decision.
- Pocket-Friendly Premiums
A term policy is a simple plan that offers wide coverage at an affordable cost. The sooner you buy the policy, the lower your premium will be. Moreover, the policyholder can also get further discounts when they buy a term policy online.
- Whole Life Cover
Some insurance plans allow you to get coverage for a long period of time. It can also extend to your whole life, meaning the coverage will last up to 99 years of age of the insured individual.
- Sum Assured Payout
Each of us has financial obligations to fulfil, such as EMIs for a new home or a car. In your absence, these liabilities may fall on your family. But, the sum assured as death benefit from your term policy can help your loved ones pay off these liabilities and still have enough to live their lives comfortably. This sum assured is paid by the insurance provider as a lump sum amount to the policy beneficiary in case of your untimely passing.
- Critical Illness Coverage
The best term policy lets you expand the scope of your insurance plan with the help of riders, such as critical illness. When you include this in your term policy, you are covered against the medical expenses borne out of life-threatening illnesses
If you are diagnosed with one of the critical illnesses, your insurance provider will provide the sum assured benefit you can use to pay for your treatment. It can also be used to pay for other household expenses that may arise due to loss of income during your recovery period.
- Tax Benefits
Another advantage of investing in a term policy is the tax benefit. According to the prevailing tax laws in India, you are eligible for tax deductions on your life insurance premiums up to Rs. 1.5 Lakhs u/s 80C of the Income Tax Act. You can also enjoy tax benefits on premium paid for your critical illness cover u/s 80D. Furthermore, the lumpsum death benefit that your family member receives is also exempted from tax u/s 10(10D).
- Easy to Understand
One of the main reasons for investing in a term policy is its ease of understanding. These pure life insurance plans offer your dependents the sum assured in case you pass away within the policy period. However, you need to ensure that you paid all the premiums consistently and on time.
- Premiums Are Locked In For A Lifetime
When you buy a term policy, your premiums are locked till the end of the policy term. That is why insurance providers, such as Max Life Insurance, recommend prospective policyholders to start investing as early as possible. When you are young and healthy, an insurance provider views you as a low-risk investor and offers you the lowest premium. You are also less likely to develop life-threatening diseases at a young age that further influences the premium.
- Claim Rejection Is The Lowest
Compared to other policies, term plans are the best option for investors because they have the lowest claim rejection. The reason is that when you buy a term policy, you are required to make full disclosure of your medical status and lifestyle habits. When people withhold such information from the insurer, they risk losing their claim to the sum assured.
However, since you are required to enter all the information truthfully, your family will receive the benefit as promised. Be sure to check the claim settlement ratio of the insurance provider before purchasing the plan.
As you can see here, a term policy has many advantages that make it an essential part of your financial portfolio. It provides you with higher coverage at a low premium and saves you money with tax savings. If you are convinced about investing in a term policy, be sure to compare different policies online before investing. Since this a long-term commitment, it is important that it meets all your needs and delivers the benefit when the time comes.