A life insurance term plan provides comprehensive coverage to the policyholder in the form of the death benefit in case of untimely demise within the policy tenure. In today’s day and age, it is crucial to buy an insurance policy as it safeguards the financial future of your family members in case of an uncertain event.
At the same time, a life insurance term plan also offers several benefits that allow you to make the most of your investment. However, to leverage these benefits, it is essential to know about them so that you can choose the right policy from the wide range of options available in the market today. Therefore, let’s discuss some of the most important benefits that you must have in your life insurance term plan.
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They offer whole life cover.
One of the most crucial benefits of a life insurance term plan is that they provide complete coverage and financial security for up to 99 years or more. Adding this plan to your investment portfolio will help lower your family’s financial burden if something happens to you.
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They are easy to understand
How often have you felt overwhelmed by the complicated jargon of life insurance policies? That is why you need to look at term insurance plans because they are easy to understand and tell you precisely what is and isn’t covered in your policy. Since there is no investment component in these plans, all your money is going towards the death benefit released to the nominee after the policyholder’s demise. You just need to make regular premium payments throughout the policy tenure to get the benefits.
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Affordable premiums
When it comes to life insurance term plans, its most crucial benefit lies in its affordability. At a fraction of a price, you will be able to afford expansive coverage. This is what makes term plans preferable over regular life insurance plans. The best way to keep the premiums at the lowest is to start investing as early as possible. In addition, you can save more money if you buy your policy online.
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Critical illness rider
When lifestyle disorders are rampant, and the cost of medical care in India is skyrocketing, adding a critical illness rider to your term plan insurance can be a lifesaver. A critical illness rider is an add-on benefit that can be attached to your policy by paying a nominal premium. If you get diagnosed with one of the illnesses during the policy duration, your insurer will pay you the lump sum amount that can be used to pay for your treatment, daily expenses, etc. If you have a history of critical illnesses, you must consider adding this rider to your policy.
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Return of premium option
If you are worried that you will not get any benefit if you outlive the policy term, you can consider getting a life insurance term plan with a return of premium option. This plan comes with a maturity benefit paid to you if you survive the policy period. However, the premium for these plans is slightly higher. So be sure to use the premium calculator to compare the benefits and premium costs to make a wise investment decision.
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Tax benefits
The term insurance plan also gives you tax benefits as per section 80C of the Income Tax Act, all the premiums paid up to Rs. One hundred fifty thousand per annum are eligible for tax deductions. At the same time, the death benefit received is also tax-exempted u/s 10(10D).
Secure your family with a term insurance plan
Just as you know, health insurance importance in your financial portfolio; the same holds for life insurance term plans. These financial instruments not only save you tax but also protect you against life’s uncertainties. If you are the sole breadwinner of the family, you must have family’s sole breadwinner a term insurance plan. By doing that, you can secure your family’s financial health and ensure that they can live comfortably, even if you are no longer there to provide for them.
When you are looking to buy the best term insurance plan, it is vital to use all the tools at your disposal to make the right choice. Since these investments are long-term, they should be sustainable and account for inflation. Therefore, you must always choose the sum assured carefully and aim for at least 15-20 times your current annual income. Additionally, you must perform other checks, such as the reliability of the insurance provider and policy inclusions and exclusions, to know exactly what you are paying for.
