What is a Pure Term Insurance Plan?
A pure term insurance plan is a type of insurance policy that provides death benefits to the policyholder’s family in case of their untimely death. The assured amount of cover offered by the pure term insurance plan is high, and this policy is available at convenient premium costs.
The pure term insurance plan premium can be paid at defined intervals such as monthly, quarterly, half-yearly, and yearly. However, this depends on the terms and conditions of the policy. With a pure term insurance plan, your loved ones will be able to live their lives and achieve goals like your child’s education, marriage, health expenses and so on without worrying about financial constraints.
Why Should You Invest in a Pure Term Insurance Plan?
1. A Pure Term Insurance Plan Secures You Financially
A pure term insurance plan secures your family’s monetary requirements in case you are not around. It helps your family achieve goals like child’s education, marriage, health expenses etc. and maintain their lifestyle even in unfavourable circumstances.
These goals vary from person to person, so one should consider the cover they need from their pure term insurance plan.
2. The Pure Term Insurance Plan Can be Bought at Convenient Premiums
Another advantage of buying a pure term insurance plan is that it can be purchased at easy premium rates. The investor receives lucrative cover at convenient premium rate. This makes a pure term insurance plan a popular choice.
3. Income Tax Benefits
The premium you pay for pure term insurance plans is applicable for tax benefits and tax deductions. Under Section 80 (C) of the Income Tax Act 1961, the premiums paid by the investor is tax exempted for up to Rs. 1.5 lakhs in one year. Under Section 10 (10D), in case the insurer dies, the death benefits will then be fully tax exempted. However, these tax laws are subject to change from time to time.
4. Pure Term Insurance Plans has Rider Options.
You can enhance your pure term insurance plan with the help of riders. Such as, you can cover death in case of accidents, using an accidental death rider. Please note that riders are optional and can be incorporated in the plan by paying additional cost.
5. Flexibility to Pay the Premium
Pure term insurance plans offer the policyholder to pay the premium in a flexible manner, i.e., the policyholder can pay the premium on a monthly, quarterly, half-yearly, and yearly basis.
6. Your Assets are Protected
In case of the policyholder’s untimely demise, the family members who are financially dependent on the policyholder may have to sell off the assets in order to arrange funds. With a pure term insurance plan, the need to sell off the assets will not arise, as a result of which your assets will be secured.
There are many insurance providers in the market right now. However, you should choose your insurance provider after doing thorough research and analysis. It is very important for policyholders to go through the various available policies and choose the one that suits your requirements, priorities, and financial health.