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What Is The Need To Purchase A Term Insurance Plan?

Published On Aug 04, 2021

Life is unpredictable, so purchasing a term insurance policy to ensure that your family is financially secure in your absence is not a bad idea. Moreover, the savings that the dependents have may not be enough to cover all of their financial needs. Thus, a term life insurance plan can be advantageous in such situations. A term plan is a type of life insurance that people can buy to protect their lives for a specific length with adequate coverage. If you are still not convinced, you must continue reading the following article that explains the need for a term insurance plan in an individual’s life.

What Is The Need To Purchase A Term Insurance Plan?

Here are some of the reasons that show the importance of term life insurance policies. 

1. Financial Safety

Having financial safety and security is the primary reason why individuals get any type of insurance plan. The family breadwinner's death could put the lives of the surviving family members into turmoil. Moreover, managing home finances and providing for the family's basic requirements becomes incredibly challenging in this situation. Therefore, the term life insurance payouts that include the entire sum assured at the time of death makes life simpler for the surviving family members.

2. Future Goals

The responsibilities of the family's sole breadwinner towards fulfilling the future goals, dreams and aspirations of the spouse, children, parents and dependents can be taken care of even after the earner's demise through a term insurance plan. After your death, the insurance company's payouts will ensure that your children have a good education and have enough money to marry. Similarly, with the right term insurance plan, your spouse and parents can live well without having to worry about money.

3. Loan Repayment

Nowadays, almost every person has a student loan, car loan, home loan or any kind of personal loan. So, if you pass away before repaying your loans and debts, the payout from the insurance plan can be used to pay off your loans and interest, ensuring that these debts do not burden your family.

4. High Coverage At Low Premium Prices

Term insurance plans provide high coverage at affordable premiums to the majority due to the lack of maturity benefits and other complications. Moreover, the price of the plans is also lower since there are no brokers or intermediaries when you buy life insurance plans online. Furthermore, it is advised to purchase a term insurance plan at a young and healthy age to get maximum coverage and benefits at low premium rates due to the low risk involved.

5. Riders

Along with death coverage, most term life insurance plans include riders that provide additional benefits to the life assured. For a small additional premium, you can add riders like an accidental cover, critical illness cover, and waiver of premium, among others. These riders ensure that you get the most out of your life insurance without spending a fortune.

6. Tax Benefits

A term plan also offers tax benefits under two different sections of the Indian Income Tax Act, 1961. Under Section 80C, a person with a term plan will be eligible for tax exemptions on the policy premium amount.  Moreover, a person who owns a term plan will also be entitled to maturity benefits under Section 10 (10D) of the Act.

Take Away

People can always buy a term insurance policy that meets their demands and requirements thanks to the wide variety of term plans accessible in the market. Moreover, the arguments mentioned above should have been enough to persuade you to buy a term plan as soon as possible. So, in conclusion, we can say that a term insurance policy is the most reliable way to ensure that you and your family have enough financial protection to face life's challenges.

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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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