Why Should I Choose A Term Plan?
Published On Dec 01, 2021 10:00 AM By InsuranceDekho
Table of Contents
A Term Life Insurance Plan is a type of life insurance that lasts for a A Term Life Insurance Plan is the most straightforward of all life insurance policies. If the insured dies during the policy's term, the policy will pay out death benefits. If you want to live comfortably without worrying about your family's future and financial security, you should purchase a term life insurance policy (in your absence).
When we first start earning money, our family, particularly our parents, encourages us to put money aside for a rainy day. Friends and coworkers gradually offer advice on how to approach financial planning. If you've ever been a part of one of these discussions, you know how important life insurance is. Those advising you would specifically advise you to get term insurance, especially if you have financial dependents. The discussion frequently focuses on how simple it is to shop online and how section 80C of the Internal Revenue Code provides tax benefits.
The premiums are among the lowest at the beginning of the policy, but they gradually rise as the insured's age increases. The policyholder pays a higher premium, receives no returns, and thus has less need for a large amount of coverage. All of this means that a standard term insurance policy is far from ideal.
Benefits Of Buying A Term Plan
Following are the benefits of buying a term plan:
1. Low Premiums
Term insurance plans provide high coverage at premiums that are affordable to the majority due to the lack of maturity benefits and other complexities. Because there are no agents or middlemen when you buy life insurance plans online, the premiums are even lower.
2. Tax Benefits
Premiums paid under Section 80C of the IT Act, as well as premiums paid toward a critical illness benefit under Section 80D of the IT Act, are eligible for tax benefits. Section 10 exempts the lump-sum amount received by nominees as the sum assured/death benefit from taxes (10D)
3. Affordable Premiums
A term insurance plan can provide you with a high-value life insurance policy for a low premium. Premiums can be paid monthly, bi-annually, or annually. The lower the premium amount you must pay the earlier you purchase a term insurance plan.
4. Locked Premium
When you buy term insurance, you're effectively locking in the premium you'll pay this year, next year, and every year until the policy expires. And it's at this point that starting your term plan as soon as possible, when premiums are lower, can save you a lot of money.
5. Death Benefit
Riders that cover accidental death, accidental disability, and critical illnesses are available as options. A term insurance plan with a return of premium and appropriate riders offers comprehensive coverage at a low cost.
As discussed in this article, term life insurance has a number of advantages. It provides more coverage for a lower premium, is simple to comprehend, and provides significant tax benefits. However, before you consider all of the benefits, remember that the primary goal of insurance is to protect you, not to save you money. Term insurance, unlike most other types of life insurance, adheres to this objective.
You may also like to read - What Is The Best Way To Check LIC Policy Status?
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.