Top 5 Benefits of Term Insurance
Published On Oct 02, 2021
Table of Contents
Do you have multiple financial goals that you want to fulfil? Do you think your financial strategy allows you to fulfill those goals? If so, are you prepared for the fact that the unpredictability of life can prevent you from attaining your financial goals? If not, you need a term insurance cover to provide the much-desired financial cover to your family so that they are not financially unstable and go ahead with attaining their life goals if you are no longer around to provide for them.
What Is Term Insurance?
Term insurance is a life insurance policy type. This category of life insurance provides death coverage to policyholders for a specific time limit or duration. If, during this specific time, the policyholder dies, the insured amount is given in the lump sum form to the nominee. One of the best things about term insurance is that it provides significant coverage for a lesser premium amount.
Top 5 Benefits of Term Insurance
If the concept of term insurance is new for you and you are looking for reasons to buy it, read the below mentioned benefits to gain a better understanding:
1. Quite Simple to Understand
Term insurance plans do not come with any complex features. These are simple-to-understand policies that provide pure life cover focusing on providing your dependents the sum assured in the event of your unfortunate death. In order to receive the benefits, all one has to do is pay their premium on time.
2. Highly budget-friendly
The premium for term insurance policies is quite low. In fact, the term insurance premium is as low as 0.1% of the total sum insured. However, it does not mean that one should go for any term insurance policy that they find as cheap. Proper research should be conducted keeping various factors like sum assured, policy term and others in mind apart from checking policy premium before taking the final decision.
3. High Coverage
Buying a traditional life insurance plan can prove to be insufficient for your family at the time of need. On the contrary, a term plan can offer you a much higher sum assured so that your dear ones as well as dependents do not have to rely on any other person for getting their financial needs met. Keep in mind that term insurance plans come at high sum assured such as Rs. 1 Crore, Rs. 2 Crore, as well as Rs. 5 Crore that you can choose as per your requirements.
4. Tax Benefits
A term insurance policy can not only provide financial security to your loved ones, but also help you gain tax benefits. A term insurance policyholder can save tax benefits under Section 80C, Section 80D and Section 10 (10D) of the Income Tax Act, 1961.
5. Same Premium
On buying a term insurance plan, you effectively lock the premium you will be paying every year until the end of the plan. It is one of the key benefits of a term insurance plan as it proves to be advantageous for term insurance policy buyers who start in the early years of life as they can buy the policy at really low premium rates.
A term insurance plan may come with many benefits, however, the key thing to remember is that it serves the purpose of protecting your loved ones. Those in need of an investment plan should explore all other life insurance types as their option.
You may also like to read - Frequently Asked Questions About 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.