Benefits Of Term Life Insurance Plans & Policy

Life insurance is a formal agreement between the insurance provider and the life assured for a fixed period of time, wherein the lump sum amount is paid by the insurance provider to the insured in return of a fixed sum known as premium over a period. If the policyholder dies during the insurance plan tenure, the insurer would provide a lump sum amount to the declared nominee.The lump sum amount offered is known as the sum assured on death or death benefit. 

Benefits Of Term Life Insurance Plans And Policy

Term life insurance plans provides some notable benefits, which are as follows:

• Lifetime Coverage

  Life term insurance plans have longer coverage. Some plans even last for 99 years.
  

• Supremely Affordable Premiums
  

  The premium for a lifetime plan is affordable as it is as low as 0.1 percent of the total sum insured.

• Tax Benefits

  There are several tax benefits associated with it, under the acts

• Section 80C

  As per section 80C, the premium paid towards life insurance policies up to the maximum limit of Rs. 1,50,000 is eligible for tax deduction and deductions are applicable if the amount of premium paid in the financial year is 20% of the sum assured amount of the policy.

• Section 80D

  Under this act, you are allowed to claim a deduction up to rupees 25,000 per budgetary year for medical insurance premium installments. The premium should be for you, your spouse and independent children.

• Section 10(10D)

  As per this section, the amount of sum assured plus any bonus paid on maturity or surrender of policy or on death of the insured are completely tax free for the receiver subject to certain conditions.

• Simplicity

  One of the most important benefits of term life insurance plans and policy is that they are easy to understand. There is no complexity in such type of insurance. Life insurance plan and policy does not have an investment component in it. You just have to pay the premiums and the insurer will cover your life for a fixed  duration to offer the insurance benefits.

• Accidental Death Benefit

  The accidental death benefit is usually paid in addition to the standard benefit payable if the insured died of natural causes.

• Critical Illness Benefits

  This plan covers the insured against life  endangering critical illnesses such as tumor, heart attack, cancer, renal or liver failure, multiple sclerosis etc. by providing a lump sum amount to the insured upon being diagnosed with a critical illness covered under the policy.

• Return Of Premium

  In life insurance plans and policies, there is the benefit of the return of premium’s survival benefit in case the insured survives the entire tenure of the policy.
  
  

• Additional Riders

  Riders are additional benefits that can be bought and added to a basic life insurance policy. They allow you to customize a policy and can add several kinds of protection if you meet their conditions. There are several additional benefit riders such as Guaranteed insurability rider, Waiver of premium rider, Accelerated death benefit rider, Child term rider, Long Term care rider, etc.

Conclusion

Term life insurance plans provide life coverage along with some additional perks for a specified period of time. They act as a reliable source during the key phases of your life and provide financial security against unforeseen events. Individuals looking for insurance plans with long term coverage and customized benefits can rely on term life insurance plans. 

Also read 

Should I Get a Term Life or Whole Life Insurance?

How To Avoid Difficulties in Buying Term Life Insurance During Covid-19

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.