Term Life insurance is the purest and most cost effective form of life insurance. This type of life insurance provides financial protection to the nominee in case policyholder dies during policy term.
What is Term Insurance?
Term insurance is a life insurance product, which offers financial coverage to the policyholder for a specific time period. In case of death of the insured individual during the policy term, the death benefit is paid by the company to the beneficiary. One should know importance of term insurance key features and why you should opt for it before buying term insurance.
Term insurance is a life insurance plan offered by an insurance company that provides comprehensive financial coverage against premiums paid for a limited period to the beneficiary of the policy; this coverage, provided under term insurance plan, is paid as death benefit upon the demise of insured during the policy term.
Among all the life insurance products, Term life insurance policy offers the highest life coverage for the minimum premiums during the term of the policy. Some Insurance Companies also cover permanent or partial disability wherein the policyholder’s regular income is disrupted.
Why You Should Buy Term Insurance?
There are various reasons to buy a term insurance. However, here are the key and basic reasons that you must buy term insurance:
- The Dependency of your Family: You can use the term insurance money to meet the monthly expenses of your dependents and family when you’re not around. Moreover, it fulfills vital life goals such as education and marriage of your child.
- Protection of the Assets: A term insurance allows you to take loans for assets such as a car or a house. Nevertheless, if you’re not around, your dependents and family might be burdened with the repayment of loans. In such circumstances, your family can utilize the term insurance pay-out in paying off the outstanding debts.
- Risks Related to Lifestyle: Present-day lifestyle problems often lead to various ailments and diseases. Some term insurance Plan do not just safeguard your dependents and loved ones after the demise of the policyholder but also offer critical illness protection for a lifetime. This key feature pays on the diagnosis of some critical illnesses such as heart attack or cancer.
Why do you need Term Insurance?
- Your family depends on you: The term insurance money can be used to meet your family’s monthly expenses and important goals like your child’s education.
- Your assets need protection: You may take loans for assets like a house or a car. However, if something happens to you, your loved ones might be burdened with loan repayments. In such a situation, the term insurance payout which your family will receive can be utilized in paying off outstanding loans.
- Lifestyle risks:Modern day lifestyle problems can lead to a host of ailments. Some term insurance plans don’t just protect your family after death but also during your lifetime by offering critical illness ^ protection. This feature pays out on the diagnosis of certain critical ailments like cancer or heart attack.
Benefits of Buying Term Insurance
- Affordable premiums: Term insurance provide large amount life insurance cover at an affordable premium. This cover can compensate for several years of lost earnings.
- Stay protected: Financial protection in the most unfortunate circumstances.
- Protection from illnesses: Critical illness benefit to your term insurance to avail good treatment for life threatening diseases without worrying about the costs.
- Tax benefits: Tax savings up to Rs. 1.5 lakh on the premium paid under section 80C on Income Tax, as per prevailing tax laws.
- Long term coverage: Long term insurance cover till age 85 that can be useful if you wish to leave a legacy for your family, subject to maximum policy term of 50 years.
- Additional Security: To increase the security of your family, a Term Policy provides additional pay-out (up to `2 crores) in case of an accidental death+.