How Do Term Plans Help in Providing Financial Backup During Tough Situations
As the family head or the breadwinner, one of your primary responsibilities is to provide the best of everything to your loved ones. At the same time, you must ensure that their future is secure so that they live a financially independent life when you are no more. Buying a term insurance policy is one of the best ways to secure your family’s financial future.
Let us look at how plans can help you and your family in providing financial backup during tough situations
• Term insurance offers high coverage and is cost-effective
A term insurance policy is commonly referred to as a pure protection policy and has the most affordable premium compared to other life insurance plans in the market. Thus, it is a cost-effective way to protect your family against future uncertainties.
Besides offering coverage at a lower premium, term insurance allows you to get high coverage. Today, you can easily purchase a term plan with a high sum assured of Rs. 1 crore or more. If something happens to you, your family can use the payout to take care of their expenses and financial liabilities.
• Secures the financial future of your family
Imagine a situation where your unfortunate demise leaves your family vulnerable to financial difficulties as they don’t have any income source. The last thing you would want for them is to face a situation where they cannot fend for themselves while already dealing with the emotional turmoil of losing a beloved family member.
You can help your family avoid facing such a challenging situation by purchasing a term plan as soon as you get your first pay cheque. One of the most significant benefits of term plans is that they allow you to secure your family’s future. You can live peacefully knowing that if something happens to you, the insurer will pay the sum assured to your family.
• Provides maturity benefits
A typical term plan does not offer any maturity benefit; at the end of the tenure, the policy becomes void, and you lose the coverage. However, if you have purchased a term life insurance policy with a return of premium option, you get a maturity benefit. In TROP, the insurer pays back the premium you have paid, provided you survive the policy tenure.
This amount can help take care of your financial needs. By the end of the policy tenure, you may be nearing retirement age, or you may need a high amount for your child’s education or marriage expenses, or you may face a medical emergency. Whatever challenging situations you may face, term insurance can help you overcome them without any hassles.
• Tax benefit
Tax saving is an important and integral part of prudent financial planning. Term insurance helps you get valuable tax benefits every year. The premium you pay for term insurance is eligible for tax benefits up to Rs. 1.5 lakhs under Section 80C of the Indian Income Tax Act.
Since term insurance is a long-term financial instrument, you can save a valuable amount throughout the tenure and use it for better purposes, like investing in an assured savings plan. You can get good returns, which you may use during tough situations.
Thus, term insurance helps in providing financial backup for tough situations in more than one way. So, make sure you purchase a robust term insurance policy and secure your and your family’s future now!