What is a Term Insurance Plan in India?
Term insurance policy is one the best insurance policies to invest in today's time. In this policy, the policyholder pays a certain amount of premiums to the insurance provider and in return, gets a lump sum amount of sum assured in case of an untimely and unfortunate demise of the policyholder within the policy term.
Investing in a term insurance policy ensures that your loved ones are financially secured and face no hassles, even when you are not around. Under the term insurance policy, you can claim various benefits such as financial security of you and your family, add-on rider benefits, death benefits, tax benefits and so on. Let us understand the benefits of a term insurance policy in brief.
Benefits Of Investing in a Term Insurance Policy
1. Financial Security of You and Your Loved Ones
We never know when we might come across an unfortunate and untimely mishap, right? It can be both emotionally and financially draining for us and our loved ones and no one wants that. To ensure that we do not face any such financial hassle, it is necessary to have invested in a term insurance policy. This policy provides a lump sum amount of death benefit in case of the policyholder's untimely and unforeseen demise within the policy term. As a result, our loved ones can move forward and attain all their life goals without facing any financial constraints in the future.
2. Tax Benefits
Did you know that one of the key benefits of investing in a term insurance policy is that you can claim tax benefits? The premiums you pay for the term insurance policy are eligible for tax benefits under Section 80C of the Income Tax Act, 1961, subject to conditions mentioned therein. You can claim upto Rs. 1.5 lakhs as tax benefits under this section. However, tax laws are subject to change from time to time.
3. Add-On Rider Benefits
No one wants to invest in multiple insurance policies to avail of different benefits, right? To make it easier and hassle-free for you, many term insurance policies offer you the benefit of add-on rider benefits. Instead of having invested in multiple policies, you can opt for add-on rider benefits, such as accidental death rider benefits, critical health rider benefits, waiver of premium rider benefits and so on. Please note that riders are not mandatory and are available at an additional cost.
4. Secure Your Valuable Assets
There may be situations wherein you will have to take a loan to meet your and your family's financial requirements. In case of an untimely and unfortunate mishap, such as the policyholder's death, the burden of repayment will fall upon your family. Your family might have to repay the loan against your valuable assets, such as a house, a car, etc. Investing in a term insurance policy will help your family easily pay off the loan debt in your absence without compromising the valuable assets.
5. Affordable Premiums with High Returns
Another key benefit of investing in a term insurance policy is affordable premiums. The premiums you pay for the term insurance policy are much cheaper and more affordable as compared to other insurance policies available such as savings and ULIPs. Moreover, the returns you will get under this policy are quite high, thus ensuring that you and your loved ones face no financial hassle or inconvenience in the future.
6. Easy and Convenient Payout Options
While investing in a term insurance policy, you can choose a payout option that suits you and your loved ones the best. In case of the policyholder's untimely and unfortunate demise, you and your family can choose how they want to receive the death benefits.
A term insurance policy is one of the simplest forms of insurance policies available today. It ensures that our loved ones face no financial drawback and can live our lives worry-free and be at peace of mind. Various benefits such as tax benefits, lump-sum death benefits, affordable premiums, etc., come with a term insurance policy.