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What's a Term Plan and Why Should You Invest in One?

What's a Term Plan and Why Should You Invest in One?

We all want a secure and safe future for ourselves and our loved ones. Uncertainties and unforeseen events often knock on our doors, which often makes it inconvenient and stressful for us. The Covid-19 pandemic was one such unforeseen and grave uncertainty that was hit globally. The pandemic taught us how unforeseen events could create a hassle and how important it is for our loved ones to be well prepared in advance. Being prepared in advance ensures that we do not have any financial drawbacks and can seamlessly live our life.

Having financial security is one such way to be well prepared for the coming days. This prepares our family and us for the future and ensures that there are no challenges. There are various advantages of investing in term plans, such as financial security, is one of the recommended ways to secure yourself and your loved ones financially. It further ensures that you are at peace of mind and do not have to worry about any financial requirements in case of unforeseen and untimely events.

There are various advantages of investing in term plans, such as financial security, return of premiums, add-on rider benefits, etc. Apart from choosing the best term plan for you and your loved ones, it is also essential to go for a trusted insurance provider to ensure that you get the best policies without any hassle.

What is a Term Plan?

A term plan is a specific form of life insurance policy that offers protection for a definite period of time known as the 'term'. In the event of the unfortunate demise of the insured person during the specified term, the insurance provider pays the beneficiaries of the insured a pre-determined sum of money known as sum assured.

People have different financial requirements and goals, whether a child's higher education or marriage, buying a house or a car, paying off a debt or a loan, etc. Moreover, we all know that the needs and requirements of us and our loved ones keep changing and growing. That is why it is essential to be financially prepared well in advance. Investing in a term plan is one of the ideal ways to prepare yourself for the future and be financially secure. A term plan provides you with various benefits and facilities that ensure that you and your loved ones are secure and seamlessly achieving your goals and dreams.

Let us look at some of the benefits of investing in a term plan.

Benefits of Investing in a Term Plan

1. Financial Security to You and Your Loved Ones

One of the key advantages of investing in a term plan is the financial security of you and your loved ones. We do not know when uncertainty or an unforeseen mishap might fall upon our family. It is therefore essential to be prepared well in advance. A term plan ensures that you and your loved ones are financially secured, face no hassle in future and are at peace of mind.

2. Death Benefits

The death of our loved ones can be both financially and mentally draining. We often get worried about how our loved ones will survive in case we are not there to provide for them. Therefore, it is essential to be prepared well in advance. A term plan provides your loved ones with death benefits in case of the policyholder's untimely and unfortunate death. This will ensure that your loved ones will not have to face any financial inconvenience in your absence and can be financially secure. Moreover, your loved ones can achieve their long-term goals seamlessly.

3. Multiple Payout Facility

To enjoy the benefits of a term plan, the policyholder has to pay the premiums. One of the key benefits of a term plan is the benefit to choose the premium-payout duration and ways.

4. Maturity Benefits

In the case where the policyholder survives the maturity period of the term plan, he or she can claim the entire amount of premium that he or she has paid for the policy, depending upon the terms of the policy. As a result, the policyholder does not have to worry about losing out on the premium amounts in such scenarios.

5. Tax Benefits

Another key feature of investing in a term plan is tax benefits. The premiums paid by the policyholder for the term plan is eligible for tax benefits under Section 80C of the Income Tax Act, 1961. However, tax laws are subject to change from time to time.

6. Secure Your Valuable Assets

You and your loved ones might have to take a loan or a debt in case of a financial emergency. In an unforeseen event such as the death of the policyholder, your loved ones might face a hassle in paying off the loan or the debt. As a result, they might have to pay off the loan against your valuable assets, such as your house, car, etc. To avoid such inconvenience, it is recommended to invest in a term plan. This will ensure that your loved ones face no hassle in paying off the debt or the loan in your absence and won't have to lose out on your valuable assets.

7. Add-on Rider Benefits

Investing in a term plan gives you the benefit to opt for add-on rider benefits. Instead of investing in new insurance policies, the policyholder can opt for add-on rider benefits, such as disability due to accident rider benefits, accidental death rider benefits, critical health benefits, waiver of premium benefits, etc. This makes it easier and convenient for the policyholder in future. Please note that riders are not mandatory and are available at additional cost.

Wrapping Up

Investing in a term plan is one of the best ways to have yourself and your loved ones financially secured. It gives us peace of mind and lets us live peacefully and worry-free.

It is important to compare and choose the smart term plan that suits our loved ones and us the most in terms of financial requirements and the premiums we can pay. Moreover, it is also essential for us to go with a trusted and a reputed insurance providing company.


*Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.
Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.

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