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Given the uncertain times we live in, life insurance is necessary for all. It allows you to secure your family’s financial future. While different types of life insurance policies are available in the market, many people prefer buying a term life insurance policy as it offers high coverage at an affordable premium. Let us look at the benefits of term life insurance.

The simplest form of life insurance policy

Term life insurance plans, which are also commonly referred to as pure-benefit plans, are easy to understand for all. They have simple terms and conditions and provide you with only life cover for a limited period, i.e., as long you pay the premiums.

Unlike other life insurance policies like ULIPs, assured savings plans or endowment policies, they don’t have any investment or savings components. So, you need not be worried about the complexities of the policy. Term insurance has clear and simple terms and conditions for policy renewal, claim settlement and premium payment, and they remain the same throughout the policy tenure.

Affordable premiums

One of the most significant benefits of term life insurance is that it has the most affordable premium; it is the lowest among all other life insurance policies. Insurance companies typically determine the premium based on age, health condition, and profession.

The sooner you purchase the policy, the lower the premium will be. Once the insurer fixes the premium at the time of buying the policy, it remains unchanged throughout the policy tenure.

Flexibility to choose the payout option

In the event of your unfortunate demise during your policy period, your financial responsibilities, like home loans, utility bills, etc., will fall onto your family. To prevent such situations, you can appoint a family member as the nominee while buying the policy to receive a lump sum amount.

Some insurers also allow you to receive the sum insured in instalments over a period. The amount can serve as a regular income and help your family meet their everyday expenses and maintain their lifestyle.

Additional protection with riders

Term plans allow you to purchase riders along with your base plan to extend the coverage scope. You can add these riders to your standard policy by paying a nominal premium and get additional financial protection. However, you must assess your insurance needs and choose the riders prudently. Some of the most common riders people buy with term insurance include –

• Premium waiver rider

• Permanent disability rider

• Critical illness rider

• Accidental death benefit rider

Return of premium option

Over the years, with the evolving insurance needs of the people, term insurance has evolved too. Today, many insurance companies offer a variety of term plans with innovative features and benefits. One such unique term plan is the term plan with a return of premium option.

As the name suggests, if you purchase term insurance with the return of premium option, the insurer pays back the premium you pay at the end of the policy term, i.e., after your plan expires or matures. This acts as a maturity benefit, which you don’t get with standard term insurance policies.

Income Tax Benefits

Apart from securing your family’s financial future, term insurance allows you to get tax benefits. The premium you pay for the policy is eligible for tax benefits up to Rs. 1.5 lakhs in a financial year under Section 80C of the Indian Income Tax Act, 1961.

In addition, the death benefits your family receives from the insurer after your demise is entirely tax-free under Section 10(10D) of the IT Act. Thus, by buying term insurance, you can have peace of mind knowing that your family will never face financial hardship and, at the same time, get valuable tax savings every year.

Final Word

Now that you know the various benefits of a life insurance term plan, make sure you purchase the best plan today and secure your family’s future.

 

Disclaimer: This article is a paid publication and does not have journalistic/editorial involvement of Hindustan Times. Hindustan Times does not endorse/subscribe to the content(s) of the article/advertisement and/or view(s) expressed herein. Hindustan Times shall not in any manner, be responsible and/or liable in any manner whatsoever for all that is stated in the article and/or also with regard to the view(s), opinion(s), announcement(s), declaration(s), affirmation(s) etc., stated/featured in the same.

 

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