Term Insurance Plan
Death of any member of the family is a painful experience and if the breadwinner of the family dies, it also brings additional financial liabilities on the family. Term insurance ensures that if the life assured dies, the daily expenses and other financial liabilities of the family are not affected as a result.
You can avail the payout benefits of a term insurance policy in a lump sum or in installments so that your family can easily meet their day-to-day expenses and other financial liabilities after you.
Term insurance is a type of life insurance policy that provides insurance cover to the insured for a specified number of years. If the life assured dies when the term insurance policy is activated, then the death benefit is paid to the nominees nominated by the life assured at the time of taking the term insurance policy. This payment can be received in lump sum or in the form of instalments.
The normal type of term insurance does not have any cash value i.e. if the life assured survives the policy term then the policy does not return any value to the life assured. Hence a term insurance policy pays the death benefit to the nominees only after the death of the individual.
Term insurance policy provides huge cover at low premium. Any person can get Term Insurance Policy for any number of years. The annual premium paid remains the same for the entire term. The younger you buy a term insurance policy, the lower the premium you have to pay for term insurance. Any person whose age is between 18 to 65 years can buy a term insurance plan.
Any death due to self-inflicted injury or suicide is not covered by the term insurance policy. Additionally, deaths due to intoxication or sexually transmitted diseases such as HIV or AIDS are also not covered. The company providing Term Insurance Policy will first check all these points and if the insurance company feels that the terms and conditions of the insurance company have been violated, then you will not be provided with any Death Benefit. .
Why Is Term Insurance Needed?
A term insurance policy plays an important role in securing the future of the family in case of death of the earning member of the family. The family gets financial security through Term Insurance Policy. Generally, if you take Term Insurance Policy, then you are provided with a cover many times more than your annual income.
- Low Premium:
The premium of all term insurance policies is very low as compared to any other type of insurance as there is no investment element in it. Hence Term Insurance Policies are available at cheap premiums.
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- Protection of Assets:
It is possible that you have taken a loan for purposes like your house, children’s education etc. Through a term insurance policy, these liabilities will be covered even in your absence. Term insurance plan ensures that these liabilities of your family can be easily settled even after your death.
- Family Lifestyle:
Today everyone wants his family to live their life comfortably. A term insurance plan does not allow you to compromise on your family’s lifestyle even when you are no more. Through Term Insurance Policy, a fixed monthly income of your family remains even in your absence. With this, he can continue with his present lifestyle.
- Uncertain Life :
Nothing is certain in any person’s life. What is the future? No one knows this. Through Term Insurance Policy, you can secure the future of your family even in your absence.
- COVID-19 Cover:
A term insurance policy also provides you cover for a variety of critical illnesses. It also provides cover for other types of uncertainty including COVID-19. Taking a term insurance policy can prove to be extremely beneficial for you.
Who Needs Term Insurance Policy?
Term Insurance Policy is beneficial for every person but it is very necessary for those people who are the only earning member of their family. These include married couples, dependent parents, children, self-employed individuals, businessmen and other types of individuals. Any one of them can make it safe by taking a term insurance policy even in their absence to ensure their family liabilities.
- Newly married couple:
If you are newly married then you can first gift your life partner a Term Insurance Policy without spending on material gifts so that they can get financial security even after your absence. The benefits of Term Insurance Policy will be provided in the form of lump sum or monthly income to your spouse and dependents at the time of their need. Therefore, the first gift you should give to your life partner is a term insurance policy to make them realize how much you think about them.
Nowadays it is not easy for parents to raise children. For their many types of needs, the expenditure incurred over time also increases. Like- fees for school expenses. The list of living expenses goes on and on. The loss of financial security could put your children’s future at risk. You must take a term insurance policy so that even in your absence your children are not deprived of financial security and can fulfill their dreams even in your absence.
- Single/Young Professionals:
You must buy Term Insurance Policy even if you are single or a young professional. Serious diseases are not only a problem for the elderly in today’s time, but it is also taking young people into its grip today. People below the age of 40 are always at risk of this. That’s why you need to buy a term insurance policy as soon as possible.
- Working Women:
If you are a working women then you must also take a term insurance policy. Through this you can build a financial security for your spouse and children so that the normal needs of your spouse and children can be met even in your absence. Apart from this, in case of serious diseases like cervical and breast cancer, it can also be dealt with through term insurance policy.
A term insurance policy is also a good idea for people looking for retirement. You can get tax exemption by taking Term Insurance Policy. Along with this, you can also provide financial security to your dependents.
You are also provided with tax benefits by the government if you take a term insurance policy. You can reduce your existing tax burden by claiming the premiums paid as deductible under section 80C.
What Are The Features Of Term Insurance?
Now we will learn about the features of Term Insurance Policy. Term insurance has the following features –
- High cover at affordable rates:
Through Term Insurance Policy, you can get a huge life insurance cover. The earlier in age you take a term insurance policy, the lesser is the amount of premium you pay. Hence, you must take a term insurance policy at a young age to take advantage of the low premium.
- Critical Illnesses Cover:
Critical illnesses are also covered by some term insurance policies as an added benefit. Through this, a customer taking a term insurance policy can avail his medical care without worrying about medical expenses in case of critical illness.
- Monthly Payment / Lump sum:
If the person taking the term insurance policy dies, then the death benefit is provided to the person nominated by him in the form of a lump sum amount or monthly income. You can choose this option as per your convenience.
- Optional Disability and Accidental Death Benefit:
Accidents can result in permanent or temporary disabilities. Even you may die. In this situation, you can easily get financial assistance in such eventualities by adding an optional disability or accidental death rider.
- Tax Benefits:
Term insurance plans offer tax savings under section 80C of the IT Act (1961). Further, the final benefit amount released under a term insurance policy is tax free under section 10(10D).
- Long Term Cover:
Through a term insurance policy, you can get the benefit of term life cover up to the age of 99 years.
- Various premium payment options:
You can choose the monthly, quarterly, half-yearly, annual or single premium option as per your convenience to pay the premium for the term insurance policy.
- Liability Benefit :
They can use the sum assured received by their dependents under the Term Insurance Policy to repay any loans or liabilities. There is no restriction on this in any way.
How To Buy Term Insurance ?
Following are some of the things to keep in mind while buying term insurance-
- Coverage Determination :
How much coverage do you need before taking a term insurance policy? It is necessary to see this. You do not have to make the mistake of choosing a low cover for a cheap term insurance policy as your lifestyle changes as you grow older. Keeping in mind that need, you can choose a suitable term insurance policy for your family.
- Standard of living :
You have to choose Term Insurance Policy according to your lifestyle. You have to keep in mind that what will be the needs of your family in future in case of your absence. Because with time the expenses also keep on increasing. Therefore, by making an estimate of this, buy Term Insurance Policy more than that so that your family is not affected in your absence.
- Understand the benefits of the policy :
You must read all the benefits carefully while taking a term insurance policy. You should see which of those benefits you need and which company is providing you all the benefits as per your requirement. Therefore, you must read the benefits of Term Insurance Policy offered by any insurance company and choose Term Insurance Policy as per your convenience.
- Get a Quote :
After choosing a good term insurance policy, you need to get a proper premium quote. Make sure you get a good quote.