Benefits of One Year Term Insurance Plan
Financial Assistance: One Year Term Insurance plan can secure the future of the policyholder's family by providing death insurance in the event of the policyholder's death. In such cases, they protect dependents such as the policyholder's children, spouse, or elderly parents from having to shoulder the financial responsibilities of the deceased.
This advantage is especially important for newlyweds or new parents, as well as businessmen who have significant debts or other financial obligations. Payments may be made on a regular basis or in one fixed amount after making a claim. The amount can be used by the deceased's family to fulfil their regular needs and also to finance future endeavours like a child's education, marriage etc.
Affordable Premiums: 1 year Term insurance policies are one of the most cost-effective types of life insurance available. They offer significant coverage amounts at a lower cost than conventional life insurance plans. This is mostly due to the shorter tenures of such plans, which can only be renewed regularly.
Flexibility: In circumstances where a policyholder has taken some sort of debt such as a loan, the one year term life insurance policy will help to decrease the degree of coverage during the tenure. When loans are gradually repaid during this period, the coverage also decreases. While some plans may also offer you various investment options that will create an income over a period of time and are added to your final payout.
Tax Benefits: Under Section 80C of the Income Tax Act of 1961, premiums charged on term plans are tax-deductible up to a maximum of Rs 1.5 lakh per year. However, death benefits are entirely exempted from tax under Section 10D. The tax benefit but this varies depends on a variety of factors such as premiums on lapsed policies may or may not be available for tax deductions, so it's important to renew policies before they expire.
Advantage for Early Buyers: If you decide to invest when you are still young, you will be able to reap a variety of benefits. But as you get older, you will get a lower premium. Buying an insurance policy when you're young means that you will get higher coverage at a lower price. At this stage, 1 year term insurance plan is one of the most cost-effective investments you can make. You get higher returns by paying a small premium.
Additional Riders/Coverage: With a rise in lifestyle disorders, it's becoming more important than ever to invest in riders like disability insurance, cancer insurance, and injury insurance. These riders are purchased in addition to the term plan and provide coverage in the event of a serious medical condition or other unforeseen circumstances.