Why you need term insurance

The well-being of the family is the top priority for anyone. If you are the sole earning member, building a financial safety net that will ensure their safety in your absence is important. With so many insurance plans offering financial security to the family of the policyholder, choosing the right one can be a daunting task.

How about you buy a term life insurance plan. It is the most basic type of life insurance product available in the market. The policy is affordable and easy to manage. The primary objective of term insurance is to provide monetary benefits to your loved in case of your death.

Apart from this, there are various reasons why one should buy term insurance in India. It includes as follows –

  1. Affordable Premiums

As explained earlier, term insurance is one of the basic life insurance plans available in the market. That being said, it has the most affordable premium rates as well. You can get a term insurance coverage of up to INR 1 Crore for an annual premium of INR 7500 approx.

  1. Financial Security To Family

The basic objective for most people to buy term insurance is to provide financial security to their loved ones. In case you are the sole earner of the family, your untimely death can have a huge impact on them (both emotionally and financially). To ensure that the financial liabilities are well taken care of without overburdening your loved ones, a term insurance plan is a must.

  1. Flexible

Ideally, term insurance only offers death benefits. If you outlive the policy, you or your beneficiaries will not receive anything. Therefore, to make term insurance a little more flexible, insurers now offer the return of premium benefit. With this feature, you will receive the premiums paid towards the policy as the maturity/survival benefit.

  1. Low Claim Rejection

When buying term insurance, ensure that you are submitting the correct information regarding your health, finances, and addictions (if any). According to the Insurance Regulatory and Development Authority of India (IRDAI), no insurer can claim that there has been non-disclosure of facts after the term insurance plan has been active for more than two years.

  1. Rider Benefits

To enhance the term insurance coverage, insurers also offer add-on benefits. Some of the common term insurance riders include –

  1. Critical Illness Cover
  2. Return of Premium
  3. Accidental Death Benefit
  4. Waiver of Premium Benefit
  5. Income Return Benefit

These rider benefits can be opted by paying additional premiums over and above the existing term plan premiums.

  1. Tax Benefits

The term insurance tax benefit is as follows –

  1. The premiums paid towards the policy can be claimed for tax deductions under Section 80C of the Income Tax Act, 1961.
  2. The death benefits received by the beneficiaries are tax-free under Section 10(10D).

How to Buy Term Insurance

Thanks to the Internet, insurers have made the product readily available online. All you have to do is visit the insurer’s official website and choose the term plan you need. Select the sum assured amount and the policy tenure. Then you can proceed to make an online payment. Upon a successful transaction, the policy will be issued to you in no time.

Over To You

Term insurance offers multiple benefits other than just protecting your family financially in your absence. It also takes care of all the financial liabilities such as debts/loans, funeral expenses, your child’s education fees, and more.

However, before you purchase the plan, compare it online with other plans offered by various insurers. If you want to determine the premiums charged on the policy before you make the purchase, use a term insurance calculator. It is an online tool to calculate the premiums based on factors such as sum assured and policy term.