Life can be uncertain, and it is impossible to predict what the future holds for you. While you may not be able to prevent any unpleasant event in the future, you can be prepared to face the situation head-on. One such critical preparation is buying a term insurance policy cover for your family.
Term insurance is a pure protection plan that provides a death benefit to the family member in the event of your unfortunate demise during the policy period. The insurer pays the sum assured to the nominee in a lump sum. This allows them to take care of their financial needs, meet the debts (if any), and be financially independent even in your absence.
If you are still contemplating whether you should buy a term plan, here are a few reasons that will convince you it is a must-have for all.
- Affordable premium
One of the significant reasons why you must purchase a term plan is that you can get coverage with a high sum assured at an affordable premium. Term plans have the lowest premium as compared to other life insurance policies.
- The benefit of buying early
Term insurance policy premium depends on the age and the policy tenure you choose. So, if you buy the policy at a young age, the premium will be comparatively lower.
- Flexible tenure
When you buy a term plan, you have the flexibility to choose the tenure. Depending on the age at the time of buying, you can buy a term plan for tenure as low as five years, or you can choose a long-term plan for 25-30 years or more. It is generally advisable to purchase a term plan that covers your family till your retirement.
- Fixed premium
Apart from the premium being affordable, once the premium is fixed at the time of buying the policy, it remains unchanged throughout the policy term. Therefore, you can be assured of paying a fixed amount periodically without the risk of any increase in the future.
- Add-on options
A term policy provides coverage only against death during the policy period. However, you can increase the policy’s coverage scope by purchasing add-ons or riders. Most insurance companies offer a variety of add-on options like accidental coverage, critical illness coverage, etc. Riders are additional benefits that you can purchase at a nominal premium.
- Tax benefits
The tax benefits of a term plan cannot be overlooked. When you buy a term insurance policy, you are eligible to get tax benefits on the premium you pay every year. You can get tax benefits up to Rs. 1.5 lakhs in a financial year under Section 80C of the Indian Income Tax Act.
Also, the death benefits your family may receive are fully tax-exempt under Section 10(10D) of the Income Tax Act.
If you have purchased a health-related rider like critical illness cover, the premium you pay for the same is also eligible for tax benefit under Section 24 of the IT Act.
- Easy to purchase
Today, with insurance companies offering online services, buying a term plan has become easier than ever before. You can compare the different plans from different insurers through various comparison sites and choose the right plan.
You can visit the respective website, buy the plan in a few easy steps, and get insured. Remember, buying a term plan online is much cheaper than buying it through an insurance agent or any other offline source.
Thus, with so many excellent benefits of a term insurance policy, it is essential for all to have a term plan in their insurance portfolio.