If you are looking to purchase term plan insurance, it is naturally a major life decision that you should consider carefully. Knowing more about the product is first essential, including aspects like coverage, benefits, features, and a lot more. Let us take a closer look at the same below.
What Does Term Insurance Entail?
Term plan insurance is a pure life coverage product. The best part is that you can get high coverage as per your selected sum assured based on the estimated future needs of your family. This is also available at a lower premium amount in comparison to several other life insurance plans. There is no cash value or investment component to these policies. The insurer will pay the fixed sum assured to the nominee in case of your unfortunate demise within the policy period. While mentally grappling with your loss, your loved ones will not have to deal with financial worries simultaneously. They can use this amount to take care of future household costs, higher education of children, and also repay any debts that you may leave behind. This is what makes term insurance the best choice for securing your family financially in case something happens to you.
Key Aspects of Term Insurance
One of the biggest things about term insurance is that you can get a lower premium amount for higher coverage, especially if you start young. This will mean that insurers perceive you as less risky in terms of medical issues or lifestyle ailments. Hence, your premium amount will be lower at a younger age and you can lock-in this amount for the entire duration of your term insurance policy.
At the same time, you can choose the premium payment frequency at the time of policy purchase, such as annual, half-yearly, quarterly, or monthly payments, although changes to frequency may not always be allowed after issuance. Some insurers also provide the option to increase the coverage amount over time with rising income and responsibilities, though this feature is not standard in all plans. Many insurers offer optional riders or add-ons that you can choose to widen your coverage. These include waiver of premium, critical illness, accidental disability or death, and so on. You can pay a nominal amount over and above the payable premium to get these riders activated with your policy, subject to the insurer’s terms.
There are also tax benefits available on the premium payments under Section 80C, subject to a limit of ₹1.5 lakh per year. At the same time, the sum assured amount paid to the nominees is tax-exempt under Section 10(10D), provided the annual premium does not exceed 10% of the sum assured for policies issued after 1st April 2012. In some cases, you can also choose the payout structure at the time of purchase, depending on what your family might require in the future.
It can be a lump sum or even a monthly payout or a combination of both as per your preferences. Of course, you should focus on getting the best possible coverage amount without compromising on it as much as possible (based on overall affordability).
Buy Term Plan Insurance Today
Without any further delays, purchase term plan insurance right away and secure your family financially without any hassles. This will help you gain mental peace, knowing that they will be safe even if something unfortunate happens to you in the future.
*Completely original. Rewritten twice.
Anantha Nageswaran is the chief editor and writer at TheBusinessBlaze.com. He specialises in business, finance, insurance, loan investment topics. With a strong background in business-finance and a passion for demystifying complex concepts, Anantha brings a unique perspective to his writing.
