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Top 5 Benefits of Buying Term Insurance Plans?

Published On Jul 05, 2021 12:00 PM By InsuranceDekho

Throughout your life, you may weave a plethora of financial objectives. Then do the math to create financial plans based on them. However, life is unpredictably unexpected. Not only can an early death threaten these ambitions, but it can also leave your family stranded. Term insurance policies are one of the most important types of life insurance policies to purchase in today's world. You can also take advantage of a number of other perks that come with term plans.

How Can Purchasing Term Insurance Be Advantageous? 

The following are the top 5 benefits of purchasing term insurance- 

1. Affordable Premium For High Sum Assured

A term insurance policy is a straightforward life insurance policy. One of the key advantages of term insurance is its low cost. In comparison to other types of life insurance, a term insurance policy has a low premium that you can pay. Another significant benefit of term insurance is that the premiums are reduced the earlier you purchase it. In other words, one of the benefits of term insurance is that the insurer's cost savings are passed on to you.

2. Simple To Comprehend

You may find it difficult to understand the insurance-specific phrases used in various life insurance policies while purchasing a life insurance policy. Term insurance policies are straightforward to understand, which is one of its most selling features. A term insurance plan does not include an investing component because it is purely a life insurance policy. You pay the premiums, and the term insurance benefits are provided by the insurer covering your life for a set period of time.

3. Tax Benefits

While the main reason for purchasing term insurance is to protect your family's future, you can also save money on taxes. Majorly speaking, 

  • Provision 80C: This section allows you to claim a deduction of up to Rs 1.5 lakh for certain investments and purchases, including the term life insurance premiums you pay.
  • Section 80D: This tax exemption is available on premiums paid for health-related insurance, such as critical illness riders. You can claim a deduction for the premium paid up to Rs 25,000.
  • Section 10 (10D): If you have term life insurance, you can claim this benefit when you claim your payout. Taxes are not applied to the total amount.

4. Facility To Personalize Coverage

For a small fee, riders expand the benefits of term insurance. Such riders safeguard your family in the event of any unforeseen circumstances.

  • Critical Illness Coverage - If you are diagnosed with a covered critical illness for the first time, the insurer will make you a lump sum payment. The revenues can be used to pay for your costly therapies while keeping your savings intact.
  • Accidental Death Benefit - If you die in an accident, your family will get additional benefits in addition to the base value guaranteed.
  • Premium Waiver- Payment is waived if you fail to pay your premiums due to causes covered by your plan, and your life insurance coverage continues until the term ends.
  • Income Benefit - If you choose this rider, you can supplement the sum assured with a regular income for your family.

5. Financial Security 

The lump-sum term plan rewards might be used by your family to pay off debts such as outstanding loans. They can put the rest of the money into investments and make a profit. If your beneficiaries require regular financial assistance, you can set up monthly payments to meet their living expenses. Term insurance with a maturity benefit also provides income throughout your retirement years.

Take Away

These products are useful financial planning tools because of their many term insurance benefits. If you have financial dependents, you must protect them from a financial disaster while you are away. And term insurance with a maturity benefit will not only protect your family from such adversity, but will also assure your financial independence in retirement.

Also read - Why Should I Buy Term Insurance Online?

What Is The Maximum Age Limit To Buy Cover Under Term Insurance?

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.        

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