As a working adult, you need to take financial planning seriously to ensure that you have adequate funds for different milestones in your life. Despite its importance, fewer people take the need of having a term life insurance policy seriously and are mostly unaware of the benefits of term insurance plans.
Did you know at least 75% of Indians remain uncovered by any form of life insurance? Moreover, of the ones insured, only 8% have enough cover to secure their families financially, reveals data by IndiaSpend.
This low penetration of life insurance indicates towards lack of awareness towards the importance of term insurance plans and their ability to safeguard your family’s finances if something happens to you.
Term insurance is not just an investment plan, but a form of life insurance cover that provides coverage for a specific period. If something happens to you during this period, such as your unexpected passing, then the insurer will pay the death benefit to your policy nominee who can use this money to get by in their life.
Here are some of the reasons why you should consider investing in a term life insurance policy if you haven’t done that already.
- Life-long Financial Security
When you invest in term insurance, you can rest assured that your family will have financial security in your absence. Due to its minimal costs, you can afford a substantial cover that will not only take of their immediate financial needs but also help them maintain a lifestyle that they are used to. With the help of your term insurance benefits, your family will be able to enjoy lifelong financial security, even in your absence.
- Secure Your Family’s Goals
Your family’s needs will not remain the same throughout life. They will change with your changing lifestyle. Therefore, your insurance should also be capable of adjusting itself to these changing needs. Some term insurance policies offer you a chance to buy a cover that is linked to various life stages. Once you reach that milestone, your sum assured will automatically increase at a specific rate as per your age.
Moreover, due to their long-term nature, term insurance plans offer your family the flexibility to choose the term plan payout option. They can either opt for a lump sum amount or receive it in equal installments to be paid every month. As a result, term insurance acts as a perfect instrument to secure your family’s financial goals and
- Protection Against Medical Emergencies
The lifestyle disorders are at an all-time high, owing to poor dietary habits and sedentary lives. Due to this reason, the incidences of critical illnesses are also at a rise. But with term insurance, you can not only protect the financial interests of your dependents but also secure yourself against these eventualities by attaching riders or add-on benefits to your policy.
For instance, supplementing your policy with a critical illness rider will help you pay for the expenses arising out of the disease, thereby reducing financial pressure on yourself as well as your family members to bear the hefty costs of treatment.
A rider can be easily included in your policy by paying a nominal fee that is added to your premium. So when you get diagnosed with one of the diseases listed in the policy document, your insurer will release the policy benefit that you can use to pay for medicines, medical tests, and any other expenses. This benefit is tax-free as per section 10(10D) of the Income Tax Act, 1961.
- Significant Tax Saving Benefits
Speaking of tax benefits, term insurance plans are a classic tax-saving instrument that is eligible for deductions up to Rs. 1.5 lakh as per Section 80C of the Income Tax Act, 1961, for the premiums paid towards your insurance. Even the sum assured paid to your family members is tax-free as per Section 10 (10D) of the Act.
- Takes Care of Liabilities
You may have an ongoing house loan, a car loan, or a credit card debt. Who will pay these debts if something happens to you? In such an event of an unfortunate incident, liabilities can be a massive cause of concern for your family members who may have no way of clearing these debts. However, investing in a term insurance plan will also help you cover your liabilities so that your dependents don’t have to worry about them if you are not around anymore
- Easy to Buy
As the use of internet has increased, so has the dependence on it! As such, the insurance providers are offering term insurance plans online at discounted rates. Term plans from reputable providers such as Max Life Insurance allow you to make online comparisons in real-time, calculate premiums, review the policy benefits, and make an informed decision to invest then and there. Besides, buying policies online is cheaper and also saves you a lot of time!
Term insurance is a crucial investment plan that you must add to your financial portfolio. Doing so will give you the ultimate peace of mind that your family’s financial wellbeing is in safe hands!