What Are The Benefits Of Term Insurance?

Gone are the days when only middle-aged people would think about insurance policies. These days, the young generation is equallyinterestedin the need for insurance for themselves. You can come across a lot of people who are investing in term insurance and already taking measures to take care of their family when they are not around.

If you are someone who cares about your family and wishes to be prepared for any unprecedented circumstance, you can find the solution through a term plan. There are many such plans such as, Max Life Smart Term Plan Life Cover, which you can opt for.There are several term insurance benefits that you need to know before investing your hard-earned money into it. Let us take a look at some of the benefits.

  • Pocket-friendly premium:You can pay less and get more. You can take a term insurance plan, get a high-value life cover but the charges are affordable. The premium for the plan can be paid monthly, half-yearly, or yearly, depending upon the company you are taking the plan from. If you buy the plan at an early age, you can get a lower premium amount with time.
  • Payouts of the sum insured:In the event of the death of the policyholder, the beneficiary will get the sum assured as the payout. The beneficiary can take the lump sum amount or take it as monthly or yearly income. This way it is a great help to the family to carry out their monthly expenses.
  • Coverage on critical illnesses:Some of the term plans offer coverage for critical illnesses also. Illnesses are unpredictable and any one of us can catch one any day. Although we cannot be sure about getting rid of the ailment, we can at least be prepared with the amount of money that can help us to get better treatment. This is when a term insurance plan helps. It will cover your medical expenses and you do not have to exhaust your savings.
  • Cover for a whole life:This is actually one of the key term plan benefitsin which the policyholder is covered for a long time and in case the breadwinner passes away, the nominee will get the money.
  • Accidental death benefit:In a situation, if you meet with an accident and fail to survive, your family gets the extra payouts.
  • Waiver of premium: If you fail to pay the premium because of any of the causes that are mentioned on the plan, the premium amount can be waived off and the life cover will continue as it is until the term ends.
  • Tax savings:Investing in term insurance can help you save money. Under Section 80C of the Income Tax Act (ITA), 1961, you can save up to 1.5 lakhs of tax deductions through the premium. With the help of a term plan, an individual under the 30% tax bracket can save around INR 46,800. Apart from this, if you choose health-related riders, you can avail of rebates under Section 80D. In fact, the death coverage that the nominee receives is also tax-exempt, which comes under the provisions of Section 10(10D) of ITA.
  • Premiums are locked for the tenure:Once you purchase an insurance plan, you lock the premium. This is going to be the same every time you pay, and with years, it will not increase. To keep the process smoother and budget-friendly, it is prudent to buy the term plan at an early age or stage of life. For example, if you are under 30 and buying a plan with coverage of INR 1 crore until the age of 75, you will have to pay around INR 10,000 yearly. However, if you buy the plan at the age of 45, you would be paying INR 30,000.

Despite the few shortcomings such as the return of premium not being available to the policyholder, there are several benefits of buying a term plan which you will understand only once you take it. Also, once you take it, you can rest assured that whatever happens in life, you will not have to suffer financially at any point.

For more information on topics related to term insurance visit IIFL Insurance Knowledge Centre.