Term Insurance: Exploring the Features
Updated On Nov 04, 2021
Term insurance is one of the popular life insurance policies that you can invest in. If you had been looking for ways to strengthen the financial security of your loved ones in your absence, term insurance would definitely serve the purpose well. What’s best is that you will be able to ensure that the financial needs of your family members or dependents are met even if you are no longer there to provide.
Features of Term Insurance
Before you move ahead with the purchase of your term insurance plan, make sure you are aware of the prime features of term insurance so that you have a clear idea of what you will be investing in. The list of key features include:
- Affordability: Term insurance policies are an affordable solution. You can expect to pay a low premium for your term insurance as compared to other life insurance policy types.
- Entry Age: You can buy term insurance in your early years. The entry age is 18 years so you can easily get a term plan with sizable coverage at a reasonable premium.
- Policy Term: In general, term insurance policy terms or tenures start from 5 years and go up to your 99th birthday in case of the whole life insurance option chosen. You can select the right term insurance policy tenure based on how long your loved ones might be dependent on you financially.
- Maturity Benefit: Term insurance helps your loved ones stay financially protected. It is a protection solution but not an investment. However, you can easily opt for term insurance with a return of premium feature in case you want some maturity benefits. On policy maturity, you can easily get back the entire premium paid throughout the policy tenure.
- Flexibility in Premium Payments: With term insurance, you can easily pay premiums as per your convenience. You can either choose annual, semi-annual, quarterly, or monthly premium payments according to your precise needs.
- Life Cover: A term plan is the financial support you need in the case of an unfortunate event. With the life coverage under the term plan, your loved ones get an assured sum if anything happens within the policy period. This payout helps the family live a peaceful life without compromising with their lifestyle or giving up on their dreams due to financial limitations.
- Additional Riders: Term insurance comes with the facility to add riders or add-on benefits to extend the cover without burning a hole in your pocket. Critical Illness Rider, Accidental Death Cover, Waiver of Premium Benefit are to name a few.
- Tax Benefits: Term plans offer various tax benefits. For instance, you can claim deductions up to Rs. 1.5 Lakh on the paid premium under Section 80C of the Income Tax Act, 1961. The payouts are tax-exempt under Section 10(10D). What’s more is that with an add-on health-related rider, a policyholder can avail tax benefits under Section 80D on the premium paid.
Term insurance is definitely a worthwhile purchase for an individual who is the sole earning member of the family. If you are ready to buy a term plan, make sure you focus on the claim settlement ratio, solvency ratio, critical illness cover availability, insurance cover and facility of additional riders before making your final decision.
If in doubt with regards to your ideal term insurance plan, you can get in touch with the InsuranceDekho experts and get your confusion cleared.
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.