Basic Things About Term Insurance
Updated On Jul 24, 2021
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When it comes to insurance products, term insurance is considered the most fruitful and core form of insurance. It is a type of life insurance cover that offers coverage to the family of the policyholder in case of his or her death during the policy term. This is not only the most economical insurance product, it also comes with different types of additional benefits as well.
What Is Term Insurance?
Term insurance is a form of life cover that promises to provide a specific amount of sum assured to the policyholder’s family in case of his or her demise. The amount is given to the beneficiary of the policyholder. The sum assured amount provided under this term insurance can help the loved ones and family of the insured person in his absence to stay financially sound and meet their financial requisites like children’s education, marriage, loan, etc. However, no benefit is given under this insurance product in case the policyholder survives the policy term.
Who Can Buy Term Insurance Plans?
A term insurance policy can be purchased by any individual who has some or many financial dependents in his or her family. A person between the age group of 18 years and 65 to 69 years is eligible to purchase a term insurance policy for their family, in case of sudden demise.
Why Should You Opt For Term Insurance?
Many people consider term insurance an investment tool for income. But, the purpose of this product is not to generate income but to extend support to your family in situations of life uncertainties. The sum assured amount received by your family or loved ones is provided to lessen their financial burden and help them meet their financial requirements, in case of your demise.
Advantages of A Term Insurance Plan
Here are some benefits that anyone can avail by having a term insurance policy:
1. Economical – The best part of term insurance is that it never requires a huge amount of investment in order to avail of its coverage. In fact, an affordable and regular amount of investment in it can provide you with higher coverage along with additional benefits.
2. Flexible Periods – With multiple insurers and the range of plans they provide, you must opt for term insurance plans commencing from a year up to 30 years or more. You can select a policy, either short or long-term, as per your financial goals and needs.
3. Multiple Options – There are different types of term insurance plans available in the market to compare and choose from. You can easily compare their features, coverage amount, term periods, premium rates, and opt for one of them as per your choice and budget.
4. Optional Rider Benefits – One can opt for an add-on to add to your term insurance plan. The add-on covers like critical illness rider, accidental death benefits, etc, enhances your coverage and prepares you for different financial requirements in different scenarios.
5. Tax Benefits – Term insurance provides a great deal of tax savings along with huge coverage. The tax-saving benefit under term insurance comes under section 80C, section 10D, and section 80D of the Income Tax Act.
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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.