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What are the benefits of buying a term insurance?

Life is uncertain. You may think that nothing can happen to you since you eat right and exercise regularly, but factors like an accident or a hurricane are always going to be beyond our control. Unpredictable events like these are when a term insurance cover proves to be beneficial.

A term plan safeguards the financial future of the policyholder’s family members in the event of the untimely passing of the insured or him/her contracting a critical illness. Due to its relatively simple nature, it has developed the reputation of being one of the most affordable insurance policies out there. The following are the benefits of having a Term insurance policy.

  • Tax Benefits

As per section 80C of the Income Tax Act, 1961 the payment of premiums towards a term insurance plan entitle you to a tax benefit of up to INR 1,50,000 yearly. This is one of the most notable term insurance benefits. In case the accident is fatal, your family will receive the sum assured, also known as Death Benefit, which is also exempt.

  • Several critical illnesses are covered

A term insurance plan particularly covers the insured in the event of a terminal illness diagnosis. Several diseases are covered under one. Post purchase, if you are diagnosed with one of them, the insurer will give you a lump sum amount.

  • Covers your family

As mentioned above, with a term insurance plan, your family will be taken care of. Certain plans provide life insurance cover for up to 50 years. Depending upon the family’s needs and requirements, they can choose from several payout methods.

  • Affordable premiums

Indian term insurance is one of the most affordable insurance plans available. This means that the premiums you pay for a term insurance plan are going to be lesser than the ones charged under other insurance plans. It will, however, mainly depend on your age at the time of you taking up one.

  • Customisable

Add-ons or Riders, as they are called, expand the scope of a term insurance plan. Each such add on has its own unique benefit and can only be availed if the insured has paid for it. Some of the examples for such riders are the ones that get you travel insurance, permit you to claim your premiums on the maturity and protect you against specific illnesses, amongst others.

  • Transparent

A term insurance plan holder does not have to deal with the complicated terminologies used in the documents of a traditional insurance policy. This is one of the most appealing features of a term insurance policy. In addition to the same, as and when you take an add-on or a rider, you will exactly know what benefit it is that you’re paying for.

  • Covered for an elongated period of time

Term Insurance plan proves its insurer with covers for up to 50 years. Some firms even provide coverage for the entire duration of your life. The upper limit in this case is generally 99 years.

Frequently Asked Questions

  • Why a term insurance plan?

A term insurance plan secures the financial future of your family members/dependents in your absence. In the event of you passing away, the insurer pays a fixed lumpsum to your family members, depending on your cover. To sum it up, it protects you and your family from most of the uncertainties of life.

  • Can it be purchased online?

Yes. All you have to do is log on to portals and browse through the plans that they offer. After selection of a plan and its riders, you just need to pay the first premium online. The same merely takes just a few minutes.

  • What happens to the money if I survive the term?

A term insurance plan only provides the benefits to the insured and their family if the term policyholder faces an untimely death. If you survive the term, you can still claim all your premiums via a lumpsum amount or monthly payouts, provided you have the right add on.