A phone purchase is always accompanied by a cover and screen protector to secure your device from damage and also for your peace of mind. Similarly, a term insurance plan is a type of life insurance policy that financially safeguards your family members for a specified period or “term” of years against regular predetermined premiums paid. In case of any unfortunate event, a benefit is paid out to the nominee if anything happens to the policyholder within the insurance term. Term insurance plans in India are the simplest and the most affordable type of life insurance plan. There are several term insurance benefits that make it a must-buy for every individual. Below is a list of the same.

1.     High Coverage at Affordable Premiums

Term insurance premiums are affordable, thus making it a popular life insurance plan. Moreover, you can pay the premium annually, half-yearly, quarterly, or monthly, depending on your preferences. There is no investment component linked to a term insurance plan, and the whole payment goes towards providing life insurance. Term insurance has a straightforward structure resulting in higher coverage but at a low premium.

2.     Coverage for Critical Illnesses

Optional term insurance riders are usually included with the plans and give additional coverage in case of specific occurrences for a small fee. Optional critical illness coverage is one of the term insurance rider advantages. The treatment of major disorders can be costly, especially with the rising expense of medical care. On the diagnosis of illnesses such as heart, kidney, liver, and other disorders listed in the rider terms and conditions, the critical illness insurance provides a lump-sum payment. The money earned from a rider cover like this can be used to pay for medical expenditures. As critical illnesses might result in a temporary or permanent loss of income, it also serves as an income replacement mechanism.

3.     Retirement Savings With Return Of Premium Option

Term insurance has no maturity benefit and only pays out upon the policyholder’s death. However, term insurance with return of premium repay the payment post the completion of the policy period. With this rider, investors can receive their premiums back after the policy term, subject to the product’s terms and conditions. This can come in handy to meet your retirement goals as well as safeguard your family during the policy period.

4.     Ease of Online Access

Several businesses have gone digital since the internet’s inception. Customers benefit greatly by accessing information or purchasing financial products over the internet. You may obtain an online term insurance plan and pay your premiums from the comfort of your home in just a few clicks. Renewal of a term plan has likewise become exceedingly simple and convenient. Online term insurance plans make securing your family’s future even more affordable and convenient.

5.     Helps During Unfortunate Circumstances

By adding an accidental death benefit to your existing term insurance policy, you can gain additional protection. By covering death as a result of an accident, this rider gives further financial help to your family. Accidental disability compensation might help you recover from a temporary or permanent disability caused by an accident. A permanent total disability might result in a loss of livelihood, and an accidental disability pay-out can help to replace that income. If you have a waiver of premium rider applied to your term policy, the insurance company will waive all future premiums if you cannot pay due to a severe illness or an accident that leaves you totally disabled.

6.     Tax Benefits

Every eligible citizen is required to pay government taxes. While it is preferable to pay taxes, purchasing a term plan can minimise one’s tax liabilities. Section 80C of the Income Tax Act, 1961 allows for a deduction of up to Rs. 1.5 lakh in annual term insurance premiums. The death benefit of a term plan is exempt from income tax under Section 10 (10D) of the income tax law. However, there have been certain changes in the tax systems as per Budget 2021, and hence should be thoroughly checked before you buy a term insurance plan only for tax-saving benefit.

Conclusion

Term insurance plans have become a requirement since the threat to human life has increased due to new forms of diseases and accidents. Anyone who contributes to the home income should obtain a term insurance policy as his or her absence could jeopardise the family’s financial stability.