5 Term Insurance Benefits You Should Consider

A term life insurance policy is an essential risk management instrument that can help protect your family’s financial future when unexpected events occur. These plans allow you to live a stress-free life and plan your financial destiny confidently and clearly.

Term policies are a necessity in this uncertain world that ensures a dignified living for your family in your absence. In addition to death payments, these plans provide a slew of other benefits to policyholders. Continue reading for more information.

What Are the Benefits of Term Insurance Policy?

Term insurance is a basic plan that ensures a dignified lifestyle for your family members without the primary breadwinner. A term insurance policy does not provide maturity benefits, but it does provide extensive coverage for a low premium. Other term plan benefits are listed below.

  • Simple and Accessible

A term life insurance is a straightforward policy with no investment or savings component. You choose a sum assured that fits within your budget and pay regular premiums. This way, you secure your life for a specific duration. The nominees receive the sum assured in the event of your untimely death during the policy’s tenure.

The term plan is offered by most of the insurers in India. The best part is that the policy provides life insurance at a low premium, making it highly affordable. The earlier you buy the policy, the lower the premium payout.

  • Riders Option

One significant advantage of purchasing term insurance is that you can supplement the standard term insurance coverage by adding riders. You can choose from a variety of riders according to your requirements. All you have to do to make your plan more comprehensive and expand your coverage is pay a small extra premium to use the services. Among the riders are:

  • Accidental death benefits,
  • Income benefit rider,
  • Accidental disability benefit,
  • Terminal illness coverage
  • Waiver of premium and more.
  • Critical Illness Coverage

If you are diagnosed with a critical illness covered by the policy, you are entitled to a one-time lump sum payment. You can utilize the funds for treatment without depleting your savings. You can quickly obtain critical illness cover as an add-on. However, before taking a policy, you must check the list of critical illnesses included in your policy.

  • Return of Premium Options

A pure term policy does not provide policyholders with any maturity benefits. It only provides a death benefit in the event of the policyholder’s untimely death. However, some insurers give a premium refund if the policyholder survives the policy term at the end of the insurance period. Furthermore, if you choose a return of premium, you will have to pay a higher premium amount than if you choose a simple term insurance plan with only life cover.

  • Tax Benefits

Tax incentives, among other term insurance benefits, are particularly helpful in reducing the tax burden. These are:

  • Section 80C

You are eligible for a tax deduction on premiums paid up to Rs. 1.5 lakh per year.

  • Section 10(10D)

The sum assured received by the beneficiaries due to the policyholder’s untimely death is tax-exempt.

  • Section 80D

The premium paid for health-related coverage, such as critical illness riders, is also entitled to a tax benefit. You can claim a deduction of Rs 25,000 for the premium paid. People regard term insurance policies as one of the needs in today’s unpredictable times. These plans provide financial security and the peace of mind to lead a carefree life.

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