Why Do You Need A Term Insurance Plan?
Published On May 30, 2021, Updated On May 31, 2021
Table of Contents
Term insurance policies help you save up for a financially stable future at a cheap premium rate. They provide insurance cover over a certain period of time or term. This makes them greatly useful in catering to short term financial goals. There are many reasons why a term insurance plan is a must buy. Find them in this article.
Why You Need a Term Insurance Plan?
The following are some important reasons why you need a term insurance plan.
Financial Support and Security
Term insurance plans adequately compensate the nominees and beneficiaries of a policyholder if they pass away before the end of the policy term. The sudden death of the policyholder can put the family in a compromising situation. However, by saving up through a term plan, you can avoid this. The death benefit is helpful in averting any financial crisis.
Affordable Premium Rates
Term insurance plans are more affordable than most other insurance options. Since they have no investment components and the brokerage fee is very low (becomes lower with time), the premium rates are usually low. You can save up any substantial amount by paying a minimal amount over time.
You may also like to read:- Types of Term Insurance Plans
Enhanced Protection Against Contingencies
Some situations incur more costs than usual. These include critical illnesses, accidents etc. To adequately finance such situations, a term insurance plan is very useful as you can add riders to your basic term insurance plan. Since the premiums for term insurance plans are low, a rider is sustainable.
Increase in Cover
Term insurance plans facilitate policyholders with an opportunity to increase their life cover. This can be done at regular intervals. The increase is by a percentage that is fixed during the commencement of the plan. This helps tackle important milestones in the life of an individual. Moreover, it also supports a potential increase in income of the policyholder.
With a term insurance plan, you can prevent your income from being taxed. Term insurance plans receive income tax benefits under the regulations stated by the Income Tax of India. The tax benefits include discounts on the premium amount as well as on the benefits that are paid out.
A term insurance plan is an affordable insurance and savings option that helps you contribute towards a financially stable future. Its benefit structure is suitable to provide for all your financial needs. Moreover, they are sustainable plans that are advantageous if kept active for a long time. Due to these several reasons that have been mentioned, it is quite necessary to purchase a term insurance plan.
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.