What is a Term Life Insurance Plan?
A term life insurance plan is a legal contract between the policyholder and the insurance providing company. As the name suggests, this plan comes for a specific duration, say 10 years, 20 years, or 30 years, and you can choose the time duration of this policy depending on your requirement. In unforeseen events, such as the untimely demise of the policyholder (in this case, single moms), the term life insurance plan will provide your child with a lump sum amount of death benefits. This will ensure that your child is financially secure and does not have to face any financial uncertainties.
What are the Benefits of Investing in a Term Life Insurance Plan?
Some of the benefits of investing in a term life insurance plan are given below –
1. Financial Safety
One of the key benefits of investing in a term life insurance plan is that it provides financial security to your family in case you meet an unforeseen and unfortunate demise. In the case of single moms, the term life insurance plan will provide financial security to your child and ensure that they can fight the rising cost of inflation rates without any hassle and achieve their dreams.
2. Tax Benefits
Investing in a term life insurance plan also has lump-sum tax deduction benefits. Single moms can claim up to Rs. 1.5 lakhs of tax deduction benefits in one financial year under Section 80C of the Income Tax Act, 1961. However, these laws are subject to change from time to time.
3. Lump-Sum Amount of Death Benefits
In case of an unfortunate demise of the policyholder (in this case, single moms), the term life insurance plan will provide a lump sum amount of death benefits to your child.
4. Benefits to Choose Add-On Rider Options
Instead of investing in multiple insurance policies to increase the benefits and the cover, you can opt for additional rider options that a term life insurance plan offers. Opting for additional rider options will save you from the confusion and hassles of investing in numerous insurance policies you will have to face. You can opt for numerous additional rider benefits, such as Waiver of Premium Rider Benefit, Accidental Death Rider Benefits, Critical Illness Rider Benefit, etc. Please note that riders are not mandatory are available at additional cost.
Your Way Forward
You now know what a term life insurance plan is, its benefits and the importance of investing in this plan, especially for single moms. Investing in a term life insurance plan will ensure that your child is financially protected and can lead a seamless life even if you are not there to provide a financial backup to them.