The Term Insurance plan is ‘Pure Protection Plan’. We all know that death is unfortunate but through the term Insurance plan, you can financially protect your loved ones against all uncertainties. In case of the sudden demise of a policyholder, compensation is given to the nominee (family member) so that they can lead a financially stable life.
Term insurance offers only death benefits to the term insurance policyholder. Read here that how term insurance works:
Term insurance is one of the most cost effective insurance plan. The premium of term insurance is lower than other insurance policies.
With term insurance, you can get peace of mind. The best way to secure the future of your loved ones financially in your absence.
Term insurance plan gives policyholders the flexibility to choose the premium payment option. You can pay premium monthly, quarterly, half-yearly or yearly basis.
If you do not want that lump sum paid by the insurer to your family in one-go after your demise. You can go with the staggering claims payout option like monthly payout for the whole life.
The policyholder can cancel the policy if not satisfied with the terms and conditions. Term Insurance policy comes with a free-look period ranging between 15-30 days.
Due to any reason, if the policyholder fails to pay premium before a due date, then can renew the policy during the grace period. It also ranges from 15 days to 30 days.
The Term Insurance Plan comes with a l tax benefits. The premium paid on term insurance comes under tax-free deduction under Section 80C of the Income Tax Act 1961. Also, as per Section 10(10D), the sum assured (SA) received on death or plan maturity is eligible for tax exemption if the premium is up to 10% of the SA or SA is at least 10X of the premium amount.
There are different types of Term Insurance Policies in India. You can choose any term insurance plan to secure your family’s financial future.
It is a basic Term insurance plan where the nominee gets the fixed income assured in case of demise of the policyholder. In this plan, no maturity benefit included.
It is a kind of Term Insurance where all premium paid at the time of maturity. Nominee will get the death benefit of the policy in case of demise of policyholder during the policy period.
It offers financial coverage for the entire group instead of one individual. The companies usually go with the option of a group insurance plan to secure the employees.
With the term plan, your term insurance cover also changes. It increases at a predetermined rate through policy tenure depending on the insurance needs.
Zero Term Insurance- In this term insurance plan, the policyholder has the flexibility to exit after completion of the specified tenure and get a return of all premiums paid until date.
Under this type of term insurance plan, the sum assured continuously decreases based on the decreasing requirements of the policyholder.
As a parent, everyone wants to secure his or her child’s future, give them the best of education, accumulate money for their wedding, etc. For this, buying a Term Insurance plan would prove beneficial, you can assure your child’s financial protection even when you are not around to protect them.
Many young professionals are sole breadwinners in their family. By purchasing a term insurance plan, you can secure your family’s future in your absence. Your family can pay off the loans and liabilities. The premium of term insurance plans of young individuals is less as compared to older people like who are above 40.
Women nowadays are no less than men when it comes to supporting families financially. Term plan helps sole breadwinner women to secure the future of their loved ones.
Even after retirement, you can buy a term insurance plan and offer financial security to your spouse. It helps them continue the same lifestyle even in your absence.
By buying a term insurance plan, the married couple can ensure complete financial support to the spouse in case of an unfortunate event. It is one of the wise life insurance plans for young couples who want to secure their future from all kinds of uncertainties.
There are tax benefits also associated with buying a Term Insurance Plan. The entire premium paid becomes eligible for tax deductions under Section 80C of the Income Tax Act, 1961. Additionally, the death benefit paid to the nominee is tax deductible under Section 10(10D) of the Income Tax Act.
A person who is self-employed is not earning a fixed income unlike a salaried individual. Their source of income is always uneven as it keeps on changing with the market up and down. Hence, purchasing a term insurance plan is necessary as it makes their family financially secure.
When you are looking to purchase a term insurance policy always assess your insurance policy requirements. You need to determine the coverage amount that should be sufficient to help your loved one in leading a healthy lifestyle even in your absence.
Term insurance plans usually come with high coverage that too at an affordable premium. The premium of term insurance is less than Life Insurance Plans. When you are buying a term insurance plan, it is wise to go with the amount that is 15-20 times of your annual income and keeping in mind the current lifestyle, expenses and inflation. If you are buying a term insurance plan of 1 crore, the minimum premium rate is Rs 500 per month.
There are many insurance companies with many insurance plans in India. So, whenever you are planning to buy term insurance, always compare and then select the one. Comparison should be with respect to features and benefits. For this, you can also take the help of a term insurance premium calculator.
Claim settlement ratio is one of the important factors to consider before buying a term insurance plan. It is the ratio number of claims approved and settled against the total number of claims received. Always go with the insurer that is offering a high claim settlement ratio.
A term insurance where there is an option to add extensive coverage is the best. This extensive coverage comes as riders. The most popular riders in Term Insurance Plan are critical illness, accelerated terminal illness, premium waiver, permanent disability rider, etc.
Sometimes going with the cheap insurance plan can be misleading, so, always go through the terms and conditions of the term insurance policy to understand the exclusions and inclusions of the term plans.
Buying term insurance plans is a wise financial decision that provides essential protection for you and your loved ones.
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The minimum age to buy a term insurance plan is 18 years and the maximum is 65 years.
There are three major benefits of buying a term insurance plan:
Yes, accidents are also a part of your term insurance policy. The insurer will be liable to pay the sum assured even in accidental deaths also whether it is health-related or due to an accident.
You can calculate your Human Life Value or HLV to better understand how much your family requires. HLV refers to the present value of future income expenses, investments, and liabilities. Individuals who earn around Rs 5 lakhs per year should get a term plan that offers at least Rs. 50 lakhs as the sum assured.10
Some of the most preferred term insurance policies in India are
On expiry of Term Insurance Plan, your family will be no longer eligible for death benefit. So as soon as your term plan expires go for a replacement policy to enjoy financial coverage. You can convert your policy into permanent insurance.
You can buy multiple term insurance plans to provide enough coverage to their family. A term insurance establishes a financial security in the absence of the primary earner. The policy provides financial protection to their family.
To ensure adequate insurance coverage while making it affordable, term insurance does not have a cash value.
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