The financial goals you set for your family are countless, and you develop strategies to achieve them. Nevertheless, these financial goals might not be achieved without your involvement. It is important to protect your family’s financial security. A term insurance plan is one of the best ways to achieve this goal since it offers a wide variety of benefits
Here are eight compelling reasons to purchase term insurance:
- Affordable Premium
The term insurance plan offers large coverage at affordable premiums, which is one of its primary advantages. A lower premium can be avail at on early age only. The process of calculating the premiums for term insurance is made even simpler by the availability of numerous online calculators that simplify the process.
- High Coverage
Term insurance plans offer a much higher sum assured, preventing your family from experiencing financial hardship in the event you don’t return. With term insurance, you are able to get 60 times more coverage than with traditional policies, ULIPs, or endowment policies.
- Cover Critical Illness
The cost of getting the necessary treatment for a critical illness can drain all your savings at any time during your lifetime. As a primary benefit, term insurance plans only provide live coverage. If you opt for add-ons/riders, you can also purchase critical illness coverage.
- Easy Payout Option
In the event of your absence, your family may be responsible for your family’s financial obligations, such as loans or debts. In this situation, the different payout options of the term plan are extremely important. The beneficiaries of your estate are likely to receive a lump sum amount to assist them with managing the liabilities described above in the event of your death.
- Easy Return
The beneficiary of a pure-term insurance policy only benefits in the event of the life insured’s untimely death. There is no maturity benefit associated with it. In contrast, if you choose the return of premium option, you will be able to get maturity benefits under a term insurance plan. Choosing this option will mean paying higher premiums, but if you survive the policy tenure, you will receive your entire premium payment back. Any taxes, levies, rider premiums, and modal amounts paid on the premium will not be included in the total premium amount to be returned.
- Tax Benefits
Tax benefits are available to NRIs on premiums paid under Section 80C and fees paid for optional riders if they choose them (based on which riders they choose). Section 10(10D) of the Income Tax Act of 1961 provides that insurance payouts are exempt if certain conditions are met.
- Choosing the Additional Riders
There are riders available for term insurance plans that enhance the basic benefits. A nominal additional premium is charged for adding these riders to your term insurance policy.
- Easy to understand
Life insurance policies with pure-term provisions only benefit the beneficiaries in the event of the death of the life insured. It does not come with a maturity benefit. Under a term insurance plan, you can get maturity benefits if you select the return of premium option.
Term insurance is an excellent way to protect your future. It comes with many benefits. If you have financial dependents, this type of instrument makes it easier to protect them from financial crises while you are away.