Ever thought what would happen to your loved ones in your absence? Are they financially stable enough to pick up where you left off? Will they be able to bear the financial burden once your income stops coming? If the answers to these questions is a no, then you need to learn about term policy.
A term policy in India has been designed to provide a financial safety net to your family in case of your untimely passing. This financial benefit will help them take care of their expenses and resume life after this tragic incident.
We are living in uncertain times when anything can happen to anyone. Not preparing for these contingencies will leave behind a vacuum that will be hard to fill in the absence of a plan. This is why it is necessary to insure yourself well ahead of time so that your loved ones remain protected even in the face of uncertainty.
The best thing about term policy is that it offers not only financial security to your dependents but also other benefits such as tax savings. When you invest in a term policy in India, you become eligible for long term savings as well as short term investment plan tax benefits u/s 80C of the Income Tax Act.
Additionally, this low-cost insurance plan gives expansive coverage at an affordable price, making it accessible to people of all ages and financial means. You can get a life cover by paying your premiums regularly to reap the benefits of this policy.
There are many more such benefits that make term policy a must-have in your investment portfolio. Let us discuss these benefits in detail to help you make an informed investment decision.
Affordable Premiums
As it has been mentioned before, a term policy is a pure insurance product that offers financial protection to your loved ones in case of your unfortunate passing during the policy term. Due to this reason, the policy offers high-value life cover at an affordable premium.
Premium payments can either be done monthly, yearly or half-yearly as per your preference. The sooner you buy your term policy, the lower your premium will be.
Flexible Payout Options
In case of your demise, the beneficiary will receive the insured amount as a payout. You can choose the option to either take it as a lump sum amount, a monthly income, or annual payment.
The flexibility of receiving the payout amount will help take care of their financial needs, maintain their lifestyle, and also manage household expenses with ease.
Rider Benefits To Supplement Your Policy
A term policy also provides the additional option to supplement your insurance policy with rider benefits. These are add-ons that offer extended coverage based on your personal preferences. This is one way to personalize your policy as per your lifestyle and budget.
For instance, if you have a sedentary lifestyle and would like to protect yourself against the expenses incurred due to certain illnesses, then you can consider adding a critical illness rider. As such, when you get diagnosed by one of the serious ailments mentioned in the insurance policy, you become eligible to receive a payout that will help you pay for your treatment and other expenses arising out of your condition.
Tax Benefits
Another crucial benefit of term policy is the tax saving. Under section 80C, you can avail tax deductions up to Rs. 1.5L on the premium paid for your policy. Even the lump sum amount received as the death benefit is tax exempted u/s 10 (10D).
Nobody thinks that something untoward will happen to them until and does, leaving them unprepared and stranded. This is the reason you must invest an insurance plan so that you can protect yourself as well as your loved ones during contingencies.
Buying a term plan is a necessary investment to minimize their financial stress that they may have to face in your absence.
Tips for Choosing the Right Plan
There are various types of a term policy in India with their respective benefits. However, you must avoid taking the one-size-fits-all approach when making such a crucial investment decision.
The key to successful life insurance purchase lies in taking adequate life cover that covers your liabilities and future expenses reasonably well. As a rule of thumb, you must always aim for at least 15-20% of your annual income as the sum assured amount. This amount will account for inflation and will likely be enough to pay for any contingencies, should something happen to you.
Be sure to keep all these crucial tips in mind before making a purchase decision.
Paper chain family protected in cupped hands -DepositPhotos
