Why a Term Life Insurance Policy Should Be in your Financial Kit

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Why a Term Life Insurance Policy Should Be in your Financial Kit

People worldwide now realise the necessity to invest in life insurance coverage. With the uncertainties rising daily, every family needs a financial cushion to support their loved ones. A term life insurance policy is undoubtedly the most suitable option if you want to gain the advantage of financial protection and tax savings.

Term life insurance policy is considered by many, as it offers death benefits if the insured passes away during the policy period. It helps financially secure your family’s future in your absence. A term life insurance policy offers multiple features and benefits to the policyholder and has become a must in your financial kit. Keep scrolling through to learn why one must invest in a term life insurance policy:

Term Life Insurance Policy

Affordable Premiums

A term insurance plan offers a cost benefit to the policyholder. This insurance plan is available at an affordable premium. It even offers flexibility to the policyholder. You can pay a monthly, quarterly, or yearly premium based on your needs and budgets.

The earlier you buy the term life insurance plan, the lower your premium amount will be paid.

Whole Life Cover

One of the key features of a term life insurance policy is that it offers whole-life coverage to the policyholder. It offers comprehensive security to the policyholder till the age of 99 years. This health insurance plan helps reduce the financial burden on the dependents when the family’s sole earner dies.

Sum Assured Pay-out

The insured person’s family members will get the sum assured as a pay out in the terrible event of their demise. A lump payment, a monthly or annual income, a combination of a lump sum and an income, or an increasing income at the start are all options available to the family of policyholders. It will assist in meeting financial necessities and cost of living obligations, among other charges.

Critical Illness Coverage

During any stage of life, you may get diagnosed with a disease that requires a huge amount of treatment. By opting for a rider or an add-on, you can select the critical illness covered under the term insurance plan. It is an add on health insurance policy that helps you to stay covered during illness. Once the disease is diagnosed, you will get a lump sum pay out.

Accident Death Benefits

Life is unpredictable, and events can never be predicted well in advance. An unpredictable accident can even lead to the worst situation, like death. You can add the rider benefit to the term life insurance policy plan to stay protected against mishaps in future.

Accident Death Benefits

Easy to Understand

A term life insurance policy is easier to understand for an investor. There is no investment component within this policy. However, you need to pay the premium on time, and you can enjoy numerous benefits of the policy.

Return on Premium Option

Term life insurance policy does not offer maturity benefits until and unless you consider the return of premium options. The return on premium option requires you to pay a higher premium but will return you the higher total premium in case you outlive the policy period. The total premium amount returned will not involve levies, taxes, rider premiums, etc.

Income Tax Benefits

A term life insurance policy offers tax-saving advantages to the policyholder. Under Section 80C, the premium amount you pay towards the term policy is exempted up to the limit of 1.5 lakhs in a year. Also, under section 10(10D) of ITA, 1961, the lump sum amount the nominee receives as sum assured is exempted from taxes.

Final Thought

A term life insurance policy offers financial security to the entire family of the insured in case of their unfortunate death. In addition, you can get additional coverage for any critical illness. It is an add-on benefit of a term life insurance policy. Before buying the policy, all you need to do is ponder and choose the best plan for you to enjoy the benefits. Now that you know how important it is to purchase a term life insurance policy when you are planning to buy one, you can use the online term insurance calculator to compare different term insurance plans. So, start searching today and enjoy the benefits.