It is crucial to be with your family and take care of their needs, be it happiness or their low points. Even though you must be trying your best, life is uncertain and a mishap can come knocking on your door anytime. If something were to occur, are you ready with a foolproof financial plan to secure them? Along with the general expense of your family, there are other requirements such as debts, education of kids, retirement corpus, etc. as well. Let us explain how you can do this with term insurance plans in India and the perks of having one.
What Is Term Insurance Plan?
A term policy is an insurance plan that protects your loved ones by providing financial cushioning during emergencies. This policy is called as pure life insurance as it presents you with a life cover. In case something were to happen to you, the needs of your family would be taken care of with a lump sum payout. The death benefit or the sum assured is an amount that is paid out in the event of death of the policyholder in return for paying regular premiums. You can now rest assured that your loved ones would be financially independent if a mishap occurred. Here are some benefits of the insurance plan that you should consider:
Benefits of Term Insurance Policy
Complete Financial Backup
Term plans enable you to get a financial backup by choosing an apt sum assured amount. As the financial stability of your loved ones depends on you, a suitable amount of cover is required. You can estimate the various expenses of your family, any loans pending, education of your children, retirement corpus for old parents, etc. The total of this can be the sum assured you opt for. Now, you can have peace of mind as you have secured a backup plan in your absence.
Flexibility of Modification
The insurance policy allows you to modify your plan and customise it based on your needs. Right from choosing add-on riders and sum assured amount to the premium payment frequency of the policy, you can customise it all. Add-on riders maximise your coverage over and above the benefits provided by the term plan. Whereas premium payment frequency permits you to choose an option depending on your income cycle. This way you can comfortably secure insurance without worrying about coverage or payments.
Tax Benefits
A big advantage of having an insurance policy is the tax benefits which reduces your tax liability. Under 80C of the Income Tax Act, 1961, you can claim the premiums paid towards term plan for income tax deductions. A maximum cap of INR 1,50,000 can be claimed per financial year. You can also claim the death benefit under Section 10(10D) as tax-free corpus. This reduces the tax applicable on your income and lessens the financial burden.
Increased Coverage
By adding insurance riders to the plan, you can increase the coverage you get from your policy. These rides combine with your term insurance and give benefits extended beyond the base plan. During unfortunate conditions such as critical illness, accidental death, permanent disability, loss of income, etc. a lump sum or regular payout is given. Thus, your finances are taken care of even when the unfortunate incidences are not covered under the term plan.
You can choose to buy term insurance online for a lower premium quote as the entire buying process is carried out online without any intermediary. In such a way, get the most of your insurance policy and secure your family for the future.
