“I won’t get anything back, if I take the term plan,” remarked my friend Sanjana as she was trying to find a way to save her tax this year and I suggested her buying Term plan.Term plan is the best form of insurance because it gives a very high cover at a low price. So along with Sanjana we would like to remind our readers about why buying Term Insurance plan is important?
Term life insurance is a policy that provides coverage at a fixed rate of payments, in event of the death of the insurer for a limited period of time. A term life insurance provides a large cover for a fixed period of time. There are several many benefits of term life insurance policy as it helps secure the future of your loved ones. It ensures that even after your death; the financial security assistance provided by you keeps rolling in. However, the nominee would only receive the sum assured the benefits in case the insurer lost his life during the specified policy term. If one dies after the term expires, there’s no payout.
Following are 5 things that one needs to know about Term Insurance Plans
1.Term Policies are Available Online There are many insurance companies offering term insurance policies online. Insurance companies have, now, made it easier by introducing e-term insurance policies. In this case, everything is managed online and for an individual who is comfortable using the internet, buying an e-term insurance policy will be the most feasible option. Fast, easy and secure!
2. Pure Term Plan (with Death Benefit ONLY) . You pay the premium for a specific period of time that is set in advance, such as 20 or 30 years. Death benefit is only available if the life insured dies within the policy tenure. If death occurs after the expiry of the term, your loved ones will not be able to receive any benefits. No amount is payable to the policyholder if the life insured survives the policy tenure.
3. A Reliable Plan to Secure Your Family’s Future : Having a term insurance plan gives you the confidence that in any case something happens to you, the plan will take care of your children’s education, housing needs and so on. A term life insurance gets you prepared for an unfortunate event like death and ensures that the financial needs of your dependents are fulfilled in your absence.
4. Low Premiums If you compare a term policy to a permanent policy, the former is definitely inexpensive. This is because a permanent policy will pay you a death benefit no matter when you die. Purchasing insurance term policy is, therefore, a profitable proposal as it is one of the few financial products that gives a high cover at a low-priced premium. It is an affordable way to gain a noteworthy cover, which will help in securing your family’s future in your absence.
5. Tax Benefits: Insurance premiums are eligible for tax exemption under section 80C and Section 10(10D) of Income Tax Act, 1961 subject to conditions as specified in those sections.
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As I have grown older and hopefully wiser, I have realised that simple ways are most effective. I have bought a term plan, have you?
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