A term life insurance policy is a financial backup for securing the future of your family. It is the need of the hour in today’s world of uncertainty. With the help of a term insurance you can effectively plan for the financial future of your family and loved ones in your absence. Getting a term insurance plan will benefit the policyholders who might be the breadwinner of the family. This plan will safeguard them from the sudden financial loss they might face in the event of an untimely death. Hence, it is always recommended to get the best term insurance policy to safeguard the future of loved ones.
Term Insurance Meaning: It is a kind of life insurance plan that provides death benefits to policyholders for a specific policy term. That is, if the policyholder dies during the policy tenure, then the insurance amount is given as a lump sum to the nominee.
Term Insurance Benefits
- Offers Financial Security for Life
An untimely death can not only jeopardize these goals but can leave your family high and dry. In such difficult times, a term life insurance financially protects your family in your absence. Usually, a term insurance plan is the best alternative if protection is required for less than ten years. Conversely, some form of cash value life insurance will generally be the best alternative if the plan needs to be continued for 15 or more years. The simplicity of term insurance is one of the reasons for its growing popularity, all you need to ensure is that the premium is paid on time.
- Critical Illness Coverage
Healthcare costs in India are increasing by the day. Given the ever-increasing health care cost of medical expenses, it only becomes necessary that you have covered through a term life insurance plan in order to avoid financial burden. Critical Illness coverage on your insurance policy helps you cover all the medical expenses with ease. Besides, the lump sum amount provided by the insurer can be used to cover any additional expenses as well.
- Protect Children’s Future
When you get a term life insurance plan, you are effectively locking the premium that is to be paid by this year, next year, and every other year till the end of the plan. And this is where it becomes highly beneficial for you if you start your term plan as early as possible when the premiums are lower. Quite often, individuals with critical illnesses do not undergo treatment due to lack of funds. With no appropriate treatment, the chances of death is quite high. However, with a critical benefit cover in place, you can receive timely funds to undergo the necessary medical treatment, thus increasing the chances of survival.
- Tax Savings
While the primary reason for buying term insurance is securing your family’s future, you also get the benefit of saving tax on it. Given below are the term insurance tax benefits.
- Section 80C: Under this section, you can claim a deduction up to Rs 1.5 lakh for certain investments and purchases that includes the premium amount you pay towards the term life insurance plan.
- Section 80D: Tax exemption is allowed on the insurance premium paid towards health coverage like critical illness cover. The policyholder can claim deductions up to Rs 25,000 for the premium paid towards it.
- Section 10 (10D): In case of term life insurance, this benefit can be claimed while claiming the payout. The entire amount is completely exempt from taxes.
Term Life Insurance cover provides higher coverage for a lower premium;it is simple to understand and comes with immense tax benefits. But before factoring in all the benefits, you should remember the core objective of getting an insurance premium is protection and not savings. Unlike most life insurance products, term life insurance remains true to this objective.