Are you considering a term insurance policy to protect your dependents? However, are you stuck wondering if it’s really worth it? Well, you are at the right place because today, we shall explore the various perks of purchasing insurance. Unlike life insurance policies, term plans are meant to cover the risk of death. If something were to happen to you, the insurance provider would pay out the death benefit to your beneficiary. But if you outlive the policy tenure, then you get no survival benefit. Then why term plan, you ask? Allow us to take you through the top 5 benefits of buying term insurance.
- Affordable insurance policy
As term insurance plans are pure risk cover, the premium rates to purchase such policies are lower than other plans. Many life insurance policies have a savings or an investment component, which lead to a hefty premium amount. But with a term plan, you can easily secure a financial backup for your dependents at a cost-effective rate. Another way to get a better insurance deal would be to have a healthy profile. In case you do not have any lifestyle habits of drinking alcohol, smoking, etc. and any medical issues, then your premium shall be quite low.
- Higher coverage
Just as mentioned above, term plans are pure risk covers and thus, you can get a higher coverage sum for the most affordable premium. When you compare the sum assured amount for term policies and any other life insurance plan, the difference in the premium rate shall be vast. Such insurance plans are the best option for financially safeguarding your family. Opting for increased coverage shall enable your loved ones to have more than enough to manage their finances without any trouble. Also, you can get an affordable premium quote that won’t burn through your income.
- Extensive protection
Term insurance only protects your family from the risk of death. So, what more protection can you get under this policy? Insurance providers enable you to maximise your coverage by adding riders to your plan. You can purchase these add-on covers over your policy against several perils. Some common riders are loss of income cover, accidental death rider, critical illness rider, waiver of premium cover, etc. Riders are available at nominal rates and their benefits extend beyond the features of your insurance. Thus, if such a mishap were to affect you, the rider would payout the benefit while your insurance continues to secure you. In this way, you can get extensive protection with rider benefits.
- Tax benefits
To reduce our tax liability, we all require some good tax-saving investment options, and a term plan is one of them. The premiums paid towards getting the insurance policy can be claimed under Section 80C of the Income Tax Act, 1961. A maximum limit of INR 1.5 Lakh is applicable to the amount you can claim per financial year. Apart from these term insurance tax benefits, the death benefit can be claimed as tax-free under Section 10(10D) of the Income Tax Act, 1961. Therefore, you can not only get a life cover against unfortunate mishaps but also avail tax perks on your investment!
- Flexible premium payment
Not every individual has a monthly income inflow. Especially if you own a business or if you are a freelancer, your financial requirements could be different. To suit your income inflow, insurance providers allow you to pick a suitable premium payment frequency. So, you can choose from monthly, quarterly, half-yearly or yearly payment based on your salary. Another benefit you can enjoy is that many a time, the overall cost of insurance can vary based on the payment frequency. Insurance with a yearly payment option could have a lower premium rate than the monthly option. Hence, if you can afford the lower premium option, then you can pick accordingly.
Term insurance plans go a long way in protecting your dependents from uncertain times in life. Instead of depending on your life savings, you can leave them a lump sum benefit for their future. So, without putting it off anymore, buy term insurance online and get a cost-effective premium today! However, it is recommended to use a term plan calculator first and understand the various exclusions mentioned under the policy and the riders before agreeing to the terms and conditions.