What is Term Life Insurance Policy?
Term life insurance policy is a long-term life insurance policy. It is a legal contract between the policyholder and the insurance provider wherein the policyholder pays a certain amount of premium to the insurance provider. In return, he can financially secure himself and his family and enjoy the benefits of the life insurance policy. It offers an assured sum in case of an unfortunate mishap, such as the investor's death. As a result, the family does not have to face any financial restrictions in the absence of the investor and can achieve their goals.
Features of Term Life Insurance Policy
There are various reasons why one should get a term life insurance policy.
1. Financial Security of their Loved Ones
No one can say when a mishap might knock on their doors. As a result, one should be financially prepared in such unforeseen cases. Investing in a term life insurance policy will provide financial backup to the policyholder's family in case of an unfortunate event such as the policyholder's death.
2. Let’s You Secure Your Assets
In case the policyholder has loans and debts that need to be cleared, a term life insurance policy lets you secure your assets. In case of an unfortunate event such as the policyholder's death, your family will not have to worry about repayment of loans and debts and face any financial burden with a term life insurance policy as the benefits received from the policy will help in repayments.
3. Affordable Premium Rates
Generally, the premiums paid by the policyholder for term life insurance policy are available at much more affordable rates than other life insurance policies.
4. Minimum Age to Invest
The minimum age to invest in a term life insurance policy is normally 18 years. As a result, if you get a term life insurance policy at an early age, you can enjoy the policy's benefits for a much longer time than if you invest at a later age.
5. Flexibility in Payment of Premiums
The policyholders who buy a term life insurance policy have the advantage of flexibility in payment of premiums. Depending on the terms of policy chosen, you can pay the premiums according to your comfort on a monthly, quarterly and yearly basis.
6. Rider Benefits
Term life insurance policy also provides rider benefits to the policyholder. Instead of buying a completely new insurance policy, the policyholder can avail various rider benefits such as critical illness rider benefits, accidental rider benefits, etc. However, riders are not mandatory and are available at additional cost.
7. Tax Benefits
Term life insurance policy also provides tax benefits to the policyholder. In this case, the premiums paid by the policyholder are eligible for tax benefits under Section 80C of the Income Tax Act, 1961. However, tax laws are subject to change from time to time.
Term life insurance policy is an ideal life insurance policy to secure yourself and your loved ones financially. Moreover, with a term life insurance policy, you and your family will not have to face any financial restrictions in achieving your long-term goals such as repayment of a loan or debt, child's education and marriage, buying a house or a car, etc.