Who Can Take Term Insurance?
Term insurance policy is a type of life insurance in which life insurance cover is provided to the policyholder for a specified period of time. In case of accidental death of the life assured during the policy term, the sum assured is provided as death benefit to the nominee by the life assured.
Term insurance plans are cost-effective as compared to other insurance plans. It offers you maximum coverage at minimum premium. You need to pay a fixed premium from time to time to continue with your term insurance plan coverage.
It is worth noting that in term insurance plans, if the life assured survives till the end of the policy term, then no benefit is provided to him.
The most important feature of a term insurance plan is that it offers you the maximum coverage at the lowest premium. Through this, you can secure the financial needs of your family members in your absence.
Now the main question comes that who can take term insurance? A term insurance plans are designed keeping in mind the need of different types of people. Next, we have given detailed information about those people who can secure the future of their family members by taking a term insurance plan.
- Young Professionals/Individuals:
For someone who is a young professional, a term insurance plan can be very beneficial. If you are the only earning person in the house, then a term insurance plan can prove to be very beneficial for you. Through this, you can help secure your family’s financial future in your absence.
If you die suddenly, your family members may face financial problems. But through a term insurance plan, you can secure your family’s financial future while you are there.
- Newly married people:
For people who have recently married, a term insurance plan can prove to be very beneficial. Through this you can avail individual term insurance plan or joint term insurance plan. In case of your unfortunate demise, you can easily help your spouse meet their future financial needs through a term insurance plan.
People who have children or have recently become parents or are planning to become parents in future can definitely think of taking a term insurance plan. If you are the sole earning member of the household and the family depends on you for their financial needs, then they must take a term insurance plan.
With the help of a term insurance plan, you can easily take care of your children’s education and various other needs in case of your unfortunate demise.
- Working Women:
If you are a working woman and your family depends on you, then a term insurance plan can prove to be very beneficial for you. If you die suddenly, your family may face financial problems. Through a term insurance plan, you can financially secure your parents/siblings/husband/children etc even in your absence.
Also, in a term insurance plan, you are also provided with the benefit of critical illness cover. Through this you can get the sum assured in the form of medical benefits in case of critical illness like breast or cervical cancer.
It is also worth noting that women are given a special discount in the premium for term insurance plans. Hence a woman can get the coverage of a term insurance plan at the lowest premium.
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Such persons whose income is more and they have to pay more tax. He can also get the benefit of tax exemption through a term plan. You can avail a tax deduction on premiums paid under Section 80C of the Income Tax Act, 1961, up to a maximum of Rs 1.5 lakh in a term insurance plan.
Also, you are eligible for tax exemption under Section 10 (10D) of the Income Tax Act, 1961 on the death benefit received under the term insurance plan.
Thus you can also reduce your tax burden through a term insurance plan.
- Self Employed:
A self employed person does not have a fixed source of income unlike salaried individuals. The income of a self-employed person depends on the ups and downs of the market. The self-employed person also has to take loans from banks and other sources to run his business. Thus buying a term insurance plan can be very beneficial for a self-employed person.
In case of an accidental death of a self-employed person, all his liabilities can be easily met with the insurance benefits available through term insurance plans. In this way, when a person is no more, the burden of his liabilities does not fall on his family members.
For individuals who are retired and their families are still dependent on them for their needs, buying a term insurance plan can be a very wise decision. Through this, if there is an accidental death of the insured person, then a lump sum amount is provided to the family members of the insured person in the form of death benefit, through which his family members can meet all their financial needs without any hindrance.
Eligibility Criteria For Term Insurance Plan
The eligibility criteria for term insurance plan are as follows-
- The buyer of term insurance plan should be an Indian citizen.
- The person will have to undergo a medical examination beforehand for term insurance.
- The premium for a term plan for a smoker will be higher than that of a non-smoker.
- Necessary documents will have to be submitted as asked by the insurance company for the term insurance plan.
Documents Required To Buy Term Insurance
The documents required to purchase term insurance are as follows-
- identity proof
- address proof
- age proof
- Income ratio