Published On : Mon, Jun 22nd, 2020

Starting a Family? Here’s Why Buying Term Plan Makes Sense for You

In our 20’s, we do not worry much about anything and are busy enjoying life to the fullest.Considerations such as buying a term policyare probably the last thing that we have on our minds. But over time, responsibilities grow, and you realize that you have family members that you need to take care of – be it your parents, wife, or kids.

A term policy helps you get one step closer to fulfilling your responsibilities. Especially if you are starting a family, aterm policyenables you to secure your family’s future financially.

However, financial security is only the only reason why buying a term policy makes sense for you, and it is also about being prepared in advance with extensive coverage for unprecedented incidents.To help you understand ‘what is term insurance’ and why you must purchase thebest term policycoverage for your new family, here are few benefits to consider:

  1. Financial Security for Life

Term policy offers you high coverage at reasonable premium rates, which is what sets them apart from other insurance policies – affordability.When you opt for a term insuranceplan, youget a reasonably large sum assured amount at a reasonably low cost.

This means that if you have other liabilities (college tuition for children, mortgage payments) that need support, term policy returns allow your family to be financially stable and prepared for unforeseen situations.Not only are term policies highly cost-effective but also provides a high coverage amount, so that you canfinancially safeguard your family for life.

  1. Protect Your Children’s Future

By investing in a term policy, you will protect the future of your children. It helps you build a safety net for your children to achieve their dreams. With a term policy, you ensure financial protectionfor their marriage or further education,even when you are not around to take care of them anymore.

You also enjoy the peace of mind since you know that your parents, spouse, and children will carry on their lives without falling into a debt trap or face any financial constraints.

  1. Avail Critical Illnesses Coverage

A term insurance policy offers you the benefit of choosing from optional riders that provide coverage against critical illnesses. It enhances the benefits of a standardterm policy when you opt for a critical illness rider and all for the addition of a nominal premium fee.

For instance, if you select the Waiver of Premium (WoP) option from the rider’s list, it ensures that in case the life assured suffers from any critical illness, the premiums on insurance do not need to be paid. Theterm policydoes not lapse and continues to provide the cover—some additional riders that you can choose from are accidentbenefit rider and critical illness rider.

  1. Significant Tax Savings

With a term policy, you receive additional benefits and not just financial security for life. When you purchase a term insurance policy, it also provides tax-waiver incentives (Tax Exemptions) under section 80C of the Income Tax Act. The insurance expenses will be deducted from the taxable income, and the policyholder’s cap is up to Rs.1.5 lakh.Besides, Under Section 10(10) D, when your dependants receive the sum assured, it is exempted from tax.

Additionally, [1]under Section 80D of the Income Tax Act, you can avail tax-saving benefits by opting for a health-related rider along with your term policy (e.g., Critical Illness Rider).To avail such tax benefits, buy term insurance from trusted and reliable insurers such as Max Life Insurance and explore an extensive range of rider optionsbefore you choose a term policy.

At a point in your life, whether you are starting a family or not, buying a term policy will become necessary, so why not start as early as possible? Doing so is smart because you would be able to secure your family’s future and enjoy benefits in the present such as tax benefits, critical illness coverage, and lower premium rates. Before you buy a term insurance policy, make sure you compare various term policies to pick the best term policy that is available.

Presently, term insurance policies are proving to be a requirement for everyone. The advantages mentioned aboveare simply a scratch on the surfaceregarding the importance of term plans in our lives.Similarly, youcan make your family financially stable and prioritize their welfare by purchasing the best term policy.