Why You Should not De-Prioritize a Term Insurance Plan: The importance of term insurance is undeniable, yet not everyone understands why a term plan can be their best choice for securing the future of their dear ones. The term policy is a pure form of life insurance. It pays a sum assured to the nominee/s of a policyholder in case of the policyholder’s untimely demise during the term of the policy.
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Reasons not to De-Prioritize a Term Insurance Plan
People tend to de-prioritize a term plan because the policy does not offer any maturity benefits. However, the term plan has many other facilities that you must know about.
1) Financial security to loved ones
People are usually stressed because they are worried about the financial wellbeing of their loved ones. This is even more serious for single-income families. If you have the same worries then the term plan can be quite beneficial to you. This is a life insurance policy, which offers financial support for the family of a policyholder in case of his or her death during the tenure of the policy. The sum assured can take care of the various financial demands that the family has to tackle in case of the earning member’s demise.
2) Additional riders
One of the best advantages of term insurance policy is the riders. These are additional benefits, which you can buy with your term plan for added premiums. The riders come with a variety of benefits like critical illness, accidental disability, and many others. You need to make sure that you buy the riders that you think will benefit you and save yourself from paying higher premiums unnecessarily.
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3) Income replacement
The families with only one earner are always exposed to greater risk when it comes to financial insecurities. In case of an accidental demise of the earner, the family may face many financial obligations such as clearing debts and managing daily expenses. This is where the term plan can be of help. It pays a lump sum that is sufficient to replace the income of the policyholder.
4) Lower premiums
The biggest benefit of the term life insurance is its affordability. The term plan pays to the nominees of the insured only in case of the policyholder’s death and there is no payment for the maturity of the plan. Hence, the policy requires lower premiums and pays a higher cover. You can lower it even more if you buy the policy from the insurer’s website. Online policies have lower charges as you can save costs on paperwork and commissions.
5) Tax benefits
According to Section 80C of the Income Tax Act, 1961 you can avail of a tax deduction of up to INR 1.5 lakh on the premiums that you pay towards the term insurance policy. In addition, the sum assured also comes with tax benefits under Section 10(10D). These benefits surely make the term plan a profitable investment option for you.
Term insurance is one policy that can be beneficial to everyone, and the affordability makes it accessible to lower-income people too. Therefore, you should invest in such an insurance plan on priority.
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