If you are the sole breadwinner of your family, you must definitely consider purchasing a term insurance policy. This is because any unfortunate eventuality can strike anytime and leave your loved ones fending on their own. However, with a term insurance policy in place, you will be able to provide financial security to your family even in your absence.It is to be noted that regular term insurance plans provide life-coverage only for a fixed duration, and in case the policyholder survives the policy term, the insurance company does notoffer any maturity benefits. This is one of the primary reasons why many individuals are reluctant to purchase a term insurance policy. However, there’s another variant of term insurance policy that allows you to obtain return on investment. This is known as term insurance with maturity benefits or Term Insurance with Return of Premium (TROP).
Let’s have a look at some of the major benefits of investing in term insurance with maturity benefit:
Return on investment
Term plan with maturity benefit is just like standard term insurance that offers financial protection to the insured’s family member against any eventuality. However, one distinctive feature of term plan with maturity benefit is that policyholders get back the premiums paid ifthey survives the policy term. The lump-sum amount received at maturity benefit can be used for various purposes such as purchasing a vehicle, planning an international trip, home renovation, etc.
Survival benefits
As mentioned earlier, the term insurance with return of premium (TROP) comes with maturity benefit and hence it is an ideal product for those who do not wish to lose out on the premiums and want some kind of return from the policy.
Tax benefits
As per the section 80C of the Income Tax Act, 1961, the premiums paid for term insurance with maturity benefits are eligible for tax deductions of up to Rs 1.5 lakh per annum. The amount received at maturity is from income tax under Section 10 (10D) of the tax laws.
Add-on benefits
A primary benefit of term insurance with maturity benefit is that the policyholders have the option to enhance their coverage. Policyholders can opt for add-ons such as accidental death, accidental disability and critical illnesses, etc. A term insurance plan with maturity benefitprovides comprehensive coverage. However, you must note that the more comprehensive your policy, the higher will be your term insurance premium.
Now that you are well aware of the term insurance meaning and its various benefits, ensure to make the most of it to provide financial security to your near and dear ones.You must note that the premium for this term insurance with maturity benefits are expensive than the regular term plans. It entirely depends on the policyholders’ preferences as to which insurance policy they wish to purchase.
Irrespective of which type of term insurance you purchase, it is essential that you compare various plans offered by different insurance providers before purchasing an online term insurance. This will help you avail a term insurance policy that fits your budget and suits your requirements in the finest way.
Nowadays, with leading insurance providers, you can buy term insurance online from the comfort of your home. Once you purchase a term insurance policy online, you should ensure that you renew it timely by paying the premium before the due date. This will prevent your term insurance policy from lapsing. Lastly, make sure that you read the policy wordings carefully before purchasing term plan online. This will not only allow you to understand the term insurance meaning in a better way but also help you avoid any inconvenience in the later stage.
