Term Insurance Benefits

Term insurance acts as a cushion for family members of the policyholder in the absence of a policyholder. A Term Insurance plan helps your family become financially independent. It is a type of policy that offers the sum assured to the family members in an event of the sudden demise of the policyholder during the policy tenure. This policy promises to offer you high insurance coverage at an affordable premium.

Top Benefits of Term Insurance

Following are benefits that you can enjoy if covered under a term insurance policy:

1. Sum Assured Payout: Term insurance is a type of life insurance policy that offers the sum assured to the family members in an event of the sudden demise of the policyholder during the tenure of the policy. This policy is said to offer you high insurance coverage with a minimum premium amount.

2. Availability of Whole Life Cover: Some of the insurance companies offer term insurance benefits for the whole life that is some of the insurance companies offer whole life cover under term insurance. This means the policyholder is entitled to life cover up to 99 years of age.

3. Critical Illness Cover: Term insurance plans offer a critical illness cover wherein the insurance plan covers the critical illness listed in the insurance company’s terms and conditions. Term insurance does not have an inbuilt critical illness cover an applicant can opt to purchase the critical illness that can be very helpful. This additional cover provides financial help for the medical expenses that have been incurred.

4. Budget-Friendly: Term insurance is known for providing life cover at affordable premiums. Term insurance plans are considered the simplest form of insurance hence the affordable premiums. Premiums of term insurance are less than other life insurance plans. Affordable premiums allow an applicant to choose the best favorable sum assured amount that helps the applicant to ensure that there is enough financial support for his/her family member after the applicant's demise.

5. Tax Benefits: Life insurance premiums qualify for tax deduction under Section 80C of the Income Tax Act. Also, as per Section 10D, the sum assured received on maturity of the life insurance plan is tax-free if the premium is up to 10% of the sum assured or the sum assured is at least 10 times the premium amount.

6. Customisation: Riders are additional benefits that an insurance company offers at the time of purchasing the life insurance plans. They are purchased with the plan increasing the premium and they enhance the life cover. Some of the common riders offered by the insurance companies are Critical Illness Rider, Accidental Death Benefit Rider, Accidental Total or Permanent Disability Rider and Waiver of Premium Rider. With these optional additional riders being offered a person can make better decisions by choosing the best plan and rider offered with it.

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FAQ About Term Insurance Benefits

  • What are the major benefits of term insurance?

    The term insurance offers several benefits to policyholders such as:

    • A substantial insurance cover at an economical price
    • The sum assured amount received by the family is tax-free.
    • Tax benefits as per the section 80C up to Rs. 1.5 Lakh on the premium paid
    • Offers peace of mind by providing financial support to your family in your absence. 
  • Can I raise multiple claims for term insurance?

    Yes, you can purchase multiple term insurance plans and raise claims from them which their insurance companies will have to honour, in case of your death during the policy term and if you have informed your new insurance company about your existing insurance policy while buying the new term plan.

  • Does the term insurance plan offer critical illness cover?

    Yes, you can get coverage for critical illness cover under the term insurance plan as per the terms and conditions of the company. However, term insurance does not come with an inbuilt critical illness cover but you can purchase an optional plan to get financial help for the medical expenses of critical illness.

  • What If I do not die within the policy period of the term insurance?

    The term insurance plan terminates at the end of its tenure, therefore, you may not be eligible for any coverage if you die after the policy term. However, some term insurance plans also come with survival benefits based on the provisions offered by the insurance company, which your family can utilize in such a situation.

  • What kinds of optional benefits are available under term insurance?

    The term insurance offers and allows you to pick different benefits as per your budget and needs such as waiver of premium benefit, accidental death benefit, protection against critical illnesses and so on.

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