Do you know what term insurance is? A term insurance plan is the preferred type of life insurance offering a death benefit in case the insured passes away. It is a good investment option because it delivers a high sum assured at affordable term insurance costs.
Furthermore, investing in term insurance coverage is crucial because no one can predict the future. The family will also have to deal with financial loss should you, unfortunately, pass away someday.
Why purchase term insurance?
- Higher coverage for low premiums: Obtain life insurance worth crores for a small fee.
- All-around defence: You are protected from hazards like losing your income by adding-on benefits like income on disability, critical illness coverage, and premium waivers.
- Protection from responsibilities, loans, and debts: A term planhelps your family pay off your obligations and liabilities in the event of your untimely passing away.
- Maximum coverage of 99 Years: Term insurance offers a lifetime of up to 99 years.
- Buy early and save extra: Younger people get lower premiums. Purchase early and make a fixed payment for the duration of the policy.
- Tax advantages totalling Rs. 46,800: Taxes can be avoided by paying term insurance premiums up to Rs. 46,800.
The earlier you get started, the safer you’ll be and the more likely you will be able to provide for your family financially through any period. A term insurance policy will assist the family in covering both short-term and long-term financial objectives.
Purchasing term insurance coverage is worthwhile, regardless of when you purchase it. A term insurance policy is superior to other life insurance products in terms of benefits. If you don’t want to deal with too many headaches, you can easily purchase an online term plan from the comfort of your home and take advantage of a concessional rate.
What advantages do term insurance policies offer?
Let’s review some of the advantages of purchasing a term insurance policy:
- Easy to comprehend: Plans for term insurance are easy to comprehend. It is one of the primary reasons why everyone still prefers to purchase term insurance. Term life insurance is a pure life insurance policy that focuses on providing an assured amount to the insured’s close family members in the event of their passing away.
- High amount ensured: Term plans are the most basic life insurance type, as mentioned. The affordable price of a term plan is another significant advantage. The term plan is easily accessible at a premium that is not too expensive compared to other policies. The premium cost will decrease the earlier you purchase a term plan. It is advised to purchase the term plan online because the premium would be lower than if you purchased it offline. Simply put, the cost-saving on the insurer’s end is transferred to the term plan as a benefit.
- Tax advantages: Purchasing a term insurance policy is mainly done to protect the family’s financial future. Term insurance tax benefit, though, is yet another important advantage.
Here are a few significant tax advantages:
- Article 80C: A person can easily claim a deduction under this up to Rs 1.5 lakh, which also covers the premium payment made for the plan.
- Article 80D: The paid premium for health-related insurance, such as a critical illness rider, is exempted. The premium that is paid towards it can be deducted from a claim up to a maximum of Rs 25,000.
- Chapter 10 (10D): This benefit is simple to obtain in the case of a term life insurance policy during payout. The entire sum is still tax-exempt. Note: Tax legislation changes may affect the term insurance tax benefits.
Considerations for purchasing a term insurance policy
Let’s briefly review the following vital factors so you can decide whether to purchase a term insurance plan online:
- Recognise your coverage requirements: It’s critical to consider your family’s and loved ones’ insurance needs before purchasing a term insurance policy.
- Establish the policy tenure: Once you have evaluated the insurance coverage, it is time to determine the tenure or the age range for which the policy is required.
- Correct selection of add-ons: Additional riders are available with term insurance plans; thus, choose one without delay.
- Observe the Claim Settlement Ratio: You should check the insurance company’s claim settlement ratio before purchasing any insurance coverage.
We hope this article has cleared out what is term insurance for you. Now you can provide an adequate financial safety net for your family in your absence, using all the points in this article.
Standard T&C Apply
There are 2 tax regimes in India – new and old. Choose the correct one after consulting an expert to get the tax benefit you desire. You can opt for a regime change during the next financial year.
All savings are provided by the insurer per the IRDAI-approved insurance plan. Standard T&C apply.
