Life is short, and one can never predict what the future holds. And to ensure that your family is financially secure even after you are gone, opting for term life insurance makes for a great idea. It is a plan that helps you prepare for any unforeseen circumstances that the future may bring. As one of the most cost-effective methods to financially secure your loved ones’ future, term insurance policy has become very popular in India. It is so because it is highly affordable, and yet your beneficiaries stay financially protected due to its extensive coverage.
For instance, if you are not around anymore, your family may suffer both emotionally as well as financially. But with a financial security net that term insurance policy provides, your family will be able to mourning peace devoid of any worries about finances and making ends meet.
Now that you have somewhat understood the gist of what is life insurance and its purpose, you need to understand that there are different plans. All insurance companies work for the betterment of their clients. Hence, they try to incorporate newer plans that will suit individual needs.
But before you dive into the directive of the term life insurance plans, you should know the reasons for buying a standard term insurance policy:
1. Low Premium
As there is no investment element in the insured amount of term life insurance plans, the premiums are much lower than any other insurance plan. You may have to pay only about one percent of your annual income to get a life cover. Besides, the premium of the term insurance policy is less than that of the other insurance policies. For instance, a plan of 1 crore would have a premium of only Rs 7 400 per annum.2. High Flexibility
One of the chief advantages of a term life insurance plan is the flexibility it offers. You have the option to buy term plans, both online and offline. And many insurance providers also allow you to change and customize the term insurance policy as and when required.
In some cases, the term plans may allow for the degree of coverage to increase throughout the tenure. It can happen when you get married or have children. Then, the coverage can be increased as per your suitability.
Thus, before you opt for term insurance, it is vital that you check your family history. For instance, you opt for a standard term life insurance plan without the critical illness rider and without taking into account the family history of diabetes. Later on in life, you may have to face expensive medical expenditures if you develop the illness.
Also, it would help if you opted for a rider only when you genuinely require it. Make sure to go through the offer document carefully before opting for a rider.
However, it may vary based on certain factors. It is essential to renew policies before the expiry as the premiums on lapsed plans may not always be eligible for tax deductions.
These are a few reasons that make a term life insurance plan a must-have. You can opt for a term insurance policy,either offline or online. You can opt for reliable insurers like Max Life Insurance. To understand the policies in detail, you can visit their website. And in case you face any trouble in understanding, you can contact them!
Sources: https://www.irdai.gov.in/admincms/cms/LayoutPages_Print.aspx?page=PageNo117
In some cases, the term plans may allow for the degree of coverage to increase throughout the tenure. It can happen when you get married or have children. Then, the coverage can be increased as per your suitability.
3. Lower Claim Rejections
It would be best if you remember to disclose facts about your health condition, finances, habits, and others before buying any term life insurance plan. As per the Insurance Regulatory and Development Authority of India (IRDAI), no insurer can claim that there has been non-disclosure of facts after two years of the policy becoming effective. Thus, making term plans one of the safest choices for securing your family’s future as there’s little chance of getting a claim rejected.4. Rider Options
The rider on options is the additional benefits that come with term life insurance plans and enhance the total coverage. Generally, these come with a nominal fee and should be taken only if required. Some of these add-ons that can be taken with your term insurance policy are critical illness, death due to accidents, partial or permanent disability, and others.Thus, before you opt for term insurance, it is vital that you check your family history. For instance, you opt for a standard term life insurance plan without the critical illness rider and without taking into account the family history of diabetes. Later on in life, you may have to face expensive medical expenditures if you develop the illness.
Also, it would help if you opted for a rider only when you genuinely require it. Make sure to go through the offer document carefully before opting for a rider.
5. Tax Benefits
Under Section 80C of the Income Tax Act of 1961, the premiums paid on term life insurance plans are tax-deductible up to a limit of Rs 1.5 lakh per annum. Apart from that,the death benefit is also fully tax-exempt in some cases under Section 80D.However, it may vary based on certain factors. It is essential to renew policies before the expiry as the premiums on lapsed plans may not always be eligible for tax deductions.
These are a few reasons that make a term life insurance plan a must-have. You can opt for a term insurance policy,either offline or online. You can opt for reliable insurers like Max Life Insurance. To understand the policies in detail, you can visit their website. And in case you face any trouble in understanding, you can contact them!
Sources: https://www.irdai.gov.in/admincms/cms/LayoutPages_Print.aspx?page=PageNo117
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