Know Why Term Insurance Is Also Called Pure Protection Plans
Updated On Feb 11, 2022
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If during the policy duration, the life assured dies, the life insurance company will pay the sum assured (life cover amount) to the nominee as mentioned in the policy document. However, if the life assured survives the policy period, there won't be any payout. And the life insurance company will not pay any benefit to the life assured. To put it in simple words, there's no maturity benefit in a term plan.
These types of policies that only cover an untimely or premature death of the life assured is called a pure death risk cover - term insurance. A term plan helps the family of the life assured to stay financially stable in case of an untimely death of the insured.
Term Insurance Plan – A Pure Risk Protection
Here's the list of benefits of a term insurance plan:
1. Provide Financial Security
Beneficial for those, who are the bread earners of the family, looking for a solution to provide financial security in case of eventuality. In case of an untimely death of the breadwinner, with the sum assured received, the dependents can pay-off any loan, child's education fees, monthly household expenses, or any other liability.
Since the term insurance plans are customizable, you can select the coverage, policy period, and the payout options - whether lump sum or income replacement term plan. If the family members are not in a position to handle an enormous amount of money, you can think of opting for an income replacement term insurance plan.
You can widen the coverage with the help of term plan riders, which are optional but paid features under term plans.Different types of Riders available under term plan includes Accidental Death Benefit Rider, Total and Permanent Disability Rider, Critical Illness Rider, Waiver of Premium Rider, Hospital Cash Rider
4. Tax Benefits
All the premiums you pay are tax deductible under Section 80C and the payout is tax free under Section 10(10D) of Income Tax Act.
5. Simple Product
Term plan is a no frills product. Simple to understand, compare, and buy hassle-free online.
Compare Term Insurance Online. The premiums are much lower when you buy online than offline. The best way to do this is to compare term insurance policies online. This way you can compare term plans offered by all the top insurance companies. When you find a right term plan, you can pay the premium online, and get a cover to protect your family's future.
Also read-Should I Go With The PPF Or the ELSS?
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.