If you are someone looking into several insurance policies and plans, you must have stumbled across a term insurance plan at least once. A term insurance plan is quite similar to a life insurance plan and can prove to be quite beneficial. If you are not familiar with what these benefits are, we have got you covered.
We know that understanding a policy is a pre-requirement for investing in that policy. Therefore, we are here to help you out. Below we have made a list of the benefits that you can get by investing in a term insurance plan.
The purpose
Before we move on to the benefits of a term insurance plan, it is essential that you find the answer to “what is a term insurance plan?”. The main purpose of a term insurance plan is to take care of one’s family and support them financially in case of unforeseen circumstances. A term insurance plan protects your family from the burden of several liabilities by providing them with financial help in case of your unforeseen demise.
Moreover, if your family is dependent on you financially or if you are the sole breadwinner of your family, getting a term insurance plan will put you at ease. This is because you will be assured that your family is taken care of financially even in circumstances of your absence.
The benefits
Now that you have an idea of what term insurance is and a broader idea of its benefits, let’s move on to the benefits provided by this policy to its holders:
● Affordable:
The premium that you pay for a term insurance policy goes for the protection of your family in cases of unexpected loss. Thus, there isn’t any investment aspect of this policy as it is not the policyholder who is receiving payouts if they survive the policy terms. As there is no investment component, the premium that you pay for these policies is much more affordable than a life insurance policy.
● High life coverage:
The coverage that a term insurance plan provides is much longer and beneficial. The policy offers a higher coverage amount up to 99 years of age. As mentioned above, these policies are comparatively affordable. Thus, you would not need to pay extra to get a higher coverage or a longer one.
● Flexible payment options:
The payment of the premium is a significant aspect of the policy, which often affects the client’s decision. A term insurance plan provides flexible payment options so policyholders can choose what they are comfortable with. You can choose your preferred frequency as well as the mode of the premium payment. Thus, you can choose how much you want to pay and whether you want to pay at once or at regular intervals.
● Tax benefits:
You also get tax benefits by going for a term insurance policy, as these policies are deductible from taxable income. Moreover, these are deductible up to a maximum of INR 1.5 lakh under Section 80C. Along with that, the financial help that the nominee receives is also tax-exempted.
● Flexible payout options:
A term insurance policy also gives you the option to choose your preferred way of the payout options available. Thus, the policyholders can decide whether the sum assured is to be paid as equal monthly income in the form of lump-sum or a combination of both. This provides the policyholder with flexibility in choosing their payout options.
● Additional protection:
A policyholder can also get additional protection over the base plan according to their needs. For this, the policyholder will have to buy a term insurance rider which provides the policyholder with different options, such as a critical illness rider, a permanent disability rider, or a critical illness rider.
Conclusion
Whether you are looking for the best term insurance or the best long-term saving plans, make sure that you do your own research on the policies and read about them as much as you can. Along with that, compare different policies offered by different insurance providers to get the best one. Taking these small steps can ensure both your and your family’s future.
That was all! Now you know what a term insurance plan is and what its benefits are. Make sure you remember these points, so you can find the policy you want to invest in!
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