Term insurance plans are purely protection based insurance plan, wherein the case of the death of the policyholder the nominee receives the entire sum assured of the policy, in either a lump sum or in the form of monthly payouts as decided upon by the policyholder. This ensures your loved ones can pay for their regular expenses as well as any big financial commitments such as mortgage payments, monthly instalments, higher education. Here are the 5 benefits of term life insurance plans and why you should invest in one today.
They offer protection at lower rates of premiums.
One of the key most advantages of investing in a term life insurance plan is that they do not charge exponential rates of premium to provide coverage. Just from reading about the differences between term plans and other plans, one thing is clear: term plans are simple and cost effective. They offer you the peace of mind of having security for your loved ones without burning a deep hole in your pocket in the form of sky-high premiums or hidden charges. Insurers can afford to do so as such plans do not have a maturity benefit. They simply expire if the policy period lapses and the designated event does not occur.
For instance, the Express Term Life Plan is a pure non-linked and non-participating term life insurance plan. The plan has a death sum assured which will be paid as a lump sum either in the case of death or the diagnosis of a terminal illness. In addition to this, it also has an additional life cover option whereby you get a lump sum benefit on death or the diagnosis of a terminal illness. Additionally, in case of accidental total and permanent disability, all future premiums of the policy are also waived off. In this plan, you get the flexibility to choose the period of protection and the period of premium payment. You also have the option of returning the policy to the company within 15 days of purchase in case you disagree with any terms or conditions.
Tax benefits of term life insurance policies.
Another major benefit of investing in a term life insurance policy is the tax benefits you can avail on the same. Under section 80C of the Income Tax Act, you are eligible to get tax deductions for up to Rs 1.5 lacs in premiums paid towards life insurance policies. One can claim deductions for premiums paid towards life insurance policies for themselves, their spouse and dependent children. Additionally, life insurance policies offer a tax-free death benefit to the nominee of the policyholder. Life insurance payouts whether it is the sum assured or coverage, received as a death benefit or upon maturity of the plan as a survival benefit, including bonuses is exempted from tax under Section 10D of the Income Tax Act, barring certain exceptions as outlined by your policy.
You can customize a term life insurance with riders.
Riders in life insurance policies are an attachment or an amendment to an existing policy that provides coverage in addition to the plan. Riders are designed to strengthen an insurance policy by providing additional benefits apart from a death benefit. Examples of riders that increase the coverage offered by your term plan include, accidental death benefit rider, critical illness rider, waiver of premium rider, amongst several others.
Term life insurance policies can help you safeguard against liabilities.
In case of your untimely demise term life insurance policies help your dependents manage any liability payments that remain. The sum assured and death benefit obtained from your term life insurance policy can help pay for any loans and mortgage payments that remain.
Term life insurance plans are simple
An underrated advantage of term plans is that they are simple and easy to understand. Often when customers start exploring life insurance plans they are overwhelmed by the options available. Due to marketing and the appeal of certain plans to offer savings and investment at the same time, customers end up taking risks and additional financial worries which defeats the purpose of having a life insurance plan. Term plans in comparison are simple protection based plans just designed to offer you coverage.