Benefits of Term Insurance
A term insurance plan is a type of life insurance. In this, if the insured person dies accidentally during the policy term, then in this case the sum assured is provided as death benefit to the nominee by the policyholder. Through this death benefit, the family members of the policyholder can meet their financial liabilities and needs without any hindrance in the absence of the life assured.
As we have seen above that through a term insurance plan, you can secure the financial future of your family in your absence. Now what are the benefits of a term insurance plan? will be discussed in detail, so that you can get detailed information about the benefits you get from a term insurance plan.
Through a term insurance plan, you can get the following benefits
- Financial Security:
The foremost advantage of a term insurance plan is that it provides financial security to your family in your absence. A term insurance plan can easily take care of all your liabilities and the financial needs of your family in your absence.
Suppose if you are the only earning member in your family and you die suddenly, then your family may face financial problems. But through a term insurance plan, you can secure your family’s financial future even in your absence. With the sum assured through a term insurance, your family can take care of all your liabilities and meet their financial needs without any hindrance.
- Affordable Premiums:
Life coverage through a term insurance plan gives you maximum coverage at a very low premium as compared to normal life insurance. Through this, you can get the benefit of maximum term insurance coverage by paying the minimum premium.
You also get the option of paying the premium as per your convenience in a term insurance plan. You can choose to pay your premiums monthly, quarterly, half-yearly, annually or as a single premium payment. The younger you take a term insurance plan, the less premium you have to pay for your term insurance plan.
- Whole Life Cover:
Through a term insurance plan, you can get life cover for a long period of time. A term insurance plan provides you an opportunity to get life cover up to the age of 100 years. If you want a life insurance plan that provides you maximum coverage for a long period of time, then you can buy a term insurance plan. In case of your death till the age of 100 years, the amount is provided as the sum assured benefit to the person nominated by you.
- Death Benefits:
Through a term insurance plan, you can get crores of rupees as sum assured as death benefit. In case of death of the life assured during the policy term, the nominee receives insurance benefits up to crores of rupees.
The insurance benefit depends on your sum assured. If you opt for a lower sum assured at the time of taking the policy, you will get a lower sum assured as death benefit, while if you opt for a higher sum assured, in case of death, the higher sum assured is paid to the nominee. Through this sum assured, your family can meet their financial needs.
- Maturity Benefits:
In a term insurance plan, if the life assured survives till the end of the policy term, then no maturity benefit is provided to him. Death benefit is provided only in case of death during the policy term.
But now such term insurance plans have also been brought by the insurance companies in which maturity benefit is also provided to you at the end of the policy. However, for this you have to pay an additional premium.
- Return of Premium:
In a term insurance plan, if the life assured survives till the policy term, then no benefit is provided to him. But now such term insurance plans are offered by insurance companies in which the premium paid by you is returned at the end of the policy term. You have to pay a little extra premium to avail this facility. In this, after the end of the policy term, all the premiums paid by you are returned to you in the form of maturity benefit.
- Riders:
In a term insurance plan, you get the option of increasing the coverage of your term plan. You can enhance your term insurance coverage by adding riders to your term insurance plan.
You have to pay a little extra premium to add these riders. But through this you can expand your term insurance coverage further.
You get the option of adding the following riders in a term insurance plan-
- Critical Illness Rider
- Accidental Death Benefit Rider
- Accidental Total or Permanent Disability Rider
- Waiver of Premium Rider
- Tax Benefits:
You can also avail tax benefits through a term insurance plan. You are eligible for tax exemption on the premium paid for a term insurance plan and the death benefit received in the term insurance plan.
Under Section 80C of the Income Tax Act 1961, you are provided with a tax deduction of up to Rs 1.5 lakh on the premium paid for term insurance.
Under Section 10 (10D) of the Income Tax Act 1961, tax exemption is provided to the death benefit received in term insurance plans.