Elaborating the Benefits of Term Insurance

Why should I invest in term insurance? Why not in an investment plan only that gives me healthy returns? And why should I invest in term insurance knowing that there are no benefits should I survive the policy term? All these are valid questions that must have crossed your mind. Let's answer these questions one after another in brief before going for an elaboration. 

Term insurance protects your dear ones with a greater sum assured for a much lower premium. The answer to the first question.

Yes, you should invest in an investment plan like a mutual fund or ULIP based on your risk appetite and investment objectives. But while mutual funds don't offer you life coverage, ULIPs give the same but not to the extent of a term life insurance. 

And while you don't receive term insurance benefits when surviving the policy term, except for the return of premium policies, there's virtually no loss for you. Your investments in mutual funds, stocks and others will let you prevail. But knowing that you have protection for your family in your potential absence due to death calms you mentally. Something that is elementary given our fast-paced life allowing us no time to take care of ourselves, inviting diseases and the subsequent symptoms, with some leading to unfortunate deaths. 

Check Out Term Insurance Benefits 

Protection Cover for Your Loved Ones

Your loved ones are your world that you want to protect no matter what. Don't let your negligence make them suffer in case of your unfortunate death. While that holds, doing an effective term insurance comparison holds even more relevance. Term insurance plans are made differently by different companies. 

Comparing them online based on their sum assured (the amount receivable upon the death of the policyholder, the premium payable by the policyholder for coverage, the policy term permissible, besides terms and conditions will help you figure out the plan that serves your purpose the best. You can do so by either visiting the website of insurance companies or a credible insurance aggregator showcasing the plans of different insurers in one place for comparison.

Higher Sum Assured 

The sum assured in the case of term insurance plans can exceed INR 1 crore for a lower premium. The same premium will command a much lower protection cover, maybe INR 10-15 lakh when buying other life insurance plans such as Unit-linked Insurance Plans (ULIPs), endowment plans, etc. 

Much Lower Premium When Buying Term Insurance in Your 20s

The term insurance premium depends to a great extent on the age at which you buy the policy. So, if you buy the policy in your 20s, the premium will be less than half of the amount payable when buying in your 40s. More protection, more peace!

Critical Illness Coverage 

Most term insurance plans come with a critical illness rider for an additional premium but can be mighty effective as you are in your 40s and so on. The poor lifestyle induced due to the hectic work life often becomes the reason for life-threatening diseases such as heart problems, chronic liver issues and alike. They not only disturb you physically but financially too. Critical illnesses, depending on their severity, can make your bank account empty in no time. So, having a cover for the same is essential. Term insurance plans offering the same through a rider ease you financially. 

Flexible Premium Payment Options

Policyholders can choose to pay the premium at any of the monthly, quarterly, half-yearly and annual intervals based on their comfort. They can use the term insurance calculator online to calculate the premium based on their age, sum assured chosen and the policy term they want. 

Tax Savings 

Besides protecting your family in your absence, it protects your bank balance while you are alive and kicking. Tax benefits of term insurance under Section 80C of the Insurance Act come into play. It offers you tax deductions of upto INR 1.5 lakh in a financial year.

Closing Comments 

Living in the present is good but ignoring the potential financial perils in your absence can make your loved ones suffer. Having coverage in line with inflation will make sure your family stays protected in the truest sense in your absence. So, if your current annual income stands at INR 6 lakh, choose a sum assured of INR 2 crore. The sum assured advised here amounts to around 35% of your current annual income. This way, you cover up your family keeping in mind the future inflation. Tune in to zarooribaathai.in for financial insights and more.