You cannot predict what is in store for you in the future. As life has become uncertain, it is necessary to secure the monetary well-being of your loved ones. After a terrible 2020 due to the Coronavirus (COVID-19) pandemic, we can hope that 2021 can change things for the good with vaccines rolling out, and the lives of the people returning to normal.
COVID-19 has made people realize that life is unpredictable, and it is important to have the right financial portfolio. So, if you are planning to give your dear ones a present this year, you can consider gifting them something memorable like a term life insurance plan. It may sound to be an expensive gift, but it is not. Anyone can afford a term insurance plan, as it is pocket-friendly. Besides this, it is one of the most popular life insurance plans available in the market today, as it offers a large sum assured at an economical premium. If you are wondering about the term insurance plan meaning, then read further.
Term insurance is purely a life insurance plan that pays a substantial sum assured to the nominees of the policy in case of an untimely death of the insured within the policy’s tenure. You can purchase term plans via the traditional method with the help of an insurance agent or through digital means. Compared to the conventional approach, an online term plan is cheaper and more convenient to buy, as you can invest in it comfortably from your house.
Listed below are a few term insurance benefits that indicate why it is an ideal gift for your family members:
- Financial protection
The sole purpose of having a term insurance plan is to safeguard the economic security of your loved ones even if you are no longer around. The sum assured received by the policy’s nominees can help them fulfill their life goals without being dependent on anyone. Ensure that your sum assured is more than your liabilities and apt for your family to meet their needs.
- Tax exemptions
Term insurance offers various tax deductions. You can claim a deduction on the premium that you pay for your term insurance plan according to Section 80C of the Income Tax Act, 1961. Here, the maximum permissible limit is capped at INR 1.5 lakh per annum. Besides this, the death benefits received by the nominees of the policy are tax-free under Section 10 (10D) of the Act.
- Fixed premium
One of the best features of a term plan is that the premium is set throughout its tenure. If you buy a term plan at an early age, you get it at a reasonable premium, as the risk of mortality or diseases is low. On the other hand, the premium for policyholders who belong to an older age group is quite costly. The key here is to start investing in a term plan as early as possible and reap the benefits of low premium rates.
You can increase the scope of your policy by purchasing the necessary riders. Though the riders will cost you a bit extra, they are worth every penny. The six most crucial term insurance riders are:
- Accidental death benefit rider
- Accelerated death benefit rider
- Accidental disability benefit rider
- Critical illness benefit rider
- Waiver of premium rider
- Income benefit rider
You can purchase such riders based on your requirements.
In a nutshell, buying a term plan will prove valuable, as it provides the much needed financial security to your family. Low premium and high sum assured are two of the best term insurance benefits that make it a customer-friendly financial product. So, without any further delay, compare different policies online, and purchase a term plan as per your monetary aspirations and needs.