Due to the uncertain nature of life, we have to be prepared for any kind of unfortunate event. But certain incidences can affect your family and make them financially dependent on someone else to make ends meet. This how a term policy aids you by preparing you financially to secure your family in case something were to happen to you. Here are the benefits of a term insurance policy that you should know:
Benefits of Term Plans
A term policy provides you with a life cover that safeguards your family in case something unfortunate happened to you. A death benefit or sum assured is given to your beneficiary on demise. This sum assured can be taken as a lump sum payout or as a regular payout.
Though term plans do not have a maturity benefit, by opting for a Return of Premium Plan (TROP) you can get all your premiums back on surviving the policy term. This serves as a survival benefit.
With a term plan, you can get a less expensive premium rate when compared to other life insurance plans. This can be due to two reasons, no agent is involved in the buying process if you get an online term plan and as term policies do not have a cash value, the premiums are more affordable. Another perk is that you can choose the premium payment frequency according to your convenience, which can be monthly, half-yearly or a yearly frequency.
With insurance policies, you can avail tax benefits on the premiums paid towards a life insurance policy under Section 80C. Also, the sum assured can be claimed for tax deductions under Section 10(10D) of the Income Tax Act, 1961. Due to such tax benefits, you are able to decrease your taxable income, making this a lucrative investment option.
Riders are additional components that you can add to your plan to increase the coverage. These riders cover you from certain mishaps like getting diagnosed with a major illness or accidental death by providing with a lump sum or regular payout. The coverage and benefit provided by the rider go beyond the term plan. You can choose add-ons like critical illness rider, a permanent disability rider, waiver of income rider, accidental death rider and many such options.
After reading about the various benefits offered by a term insurance policy, you can now choose the best insurance provider in India and protect your family from any adverse conditions that may occur. It is advised to get premium quotes from several providers before finalizing the insurance companies.