Why Do You Need Term Insurance Coverage?
Updated On Oct 03, 2021
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Nowadays, people have begun realizing the significance of having a life insurance plan. There was a time when purchasing a term insurance cover was the last thing that individuals would have thought about for securing their future. However, with time, the youth today has become responsible and has started to realise the importance of early investment in life. Having a term insurance plan from an early age has several benefits associated, suppose, in case you buy a term insurance cover at an early age, you will have to pay a lower premium rate as compared to what you would have to pay when you are aged. Additionally, you would also be able to create a financial safety net for you as well as your family members from an early age.
Some of the benefits that can be availed from buying a term insurance plan are as follows:
1. Financial Stability for Your Loved Ones
One of the main reasons behind why a person purchases a term insurance plan is to create financial stability for their loved ones even in their absence. A term insurance plan offers complete sum assured to the appointed nominee in the event of unforeseen death of the policyholder. Buying a term insurance cover becomes even more important in case you are the sole earning member in your family. This is because due to your untimely demise your dependents would have to go through not just emotional instability but also financial.
2. Paying Off Liabilities and Debts
Generally, it is a possibility that each individual would have an obligation to pay some liability or debt in their lifetime. This could be anything be it home loan, education loan, property loan, or any other liability. The compensation received from the insurance company under a term insurance cover can be utilized in paying off such loans and liabilities so that the burden of such things would not fall on the shoulders of other family members in the event of the untimely death of the policyholder.
3. Huge Coverage at Lower Premium
A term insurance plan offers high coverage at low premium rates because of the absence of other benefits that one can obtain from different life insurance products. Hence, under a term insurance plan, coverage is affordable by every person, thus making it accessible for the masses.
4. Fixed Premium
Once the term insurance cover of an individual is accepted by the insurance company at a particular premium, it would never get changed or revised during the plan tenure. Hence, you can be at peace by knowing that you are required to pay a fixed amount per annum without any further increase in the cost in future. The taxes are payable on the insurance premium according to the current taxation laws as stated by the Government of India.
5. Income Tax Benefit
An individual’s claim for the term insurance cover regarding the premium paid is tax deductible up to Rs. 15,000 per annum as per section 80C of the Income Tax Act. Moreover, the death benefit paid to the nominee is tax deductible under section 10(10D) of the Income Tax Act.
At the End
With the increase in awareness amongst the masses regarding a life insurance cover, the term insurance plans are the most sought after plans because of the inherent benefit of a life insurance plan at the lowest premium amount, income tax benefits and mainly due to the ability to offer financial stability to your loved ones in your absence. Thus, buying a term insurance plan at the earliest is one of the most important tasks that one needs to do.
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.