With the increasing uncertainty in our lives, your family members can experience financial turmoil in your death. In the event of the policyholder’s death during the term plan, the nominee will be paid the sum insured. The straightforward product will cast a strong, secure net to provide financial security for your family in your absence.
What is term insurance?
The plan is one of the important branches of life insurance. The plan offers financial coverage for a predefined policy term in return for a fixed premium, though some policies may offer flexible premium options. The term insurance plan secures the financial interest of your family members in your absence. This single-term plan can help to cover different expenses like housing, groceries, education, and more. Thus, investing in a strategic term life insurance policy is crucial.
How term insurance provides security for your family’s future
Lost Income Replacement
With the sudden loss of a member in a family, and the individual being a sole breadwinner, the family suffers not only the emotional breakdown but also the loss of income. In the case of families that have one earning member, this can be catastrophic. Term insurance policies give a lump sum amount that can be invested by the nominee in any form, like annuities, mutual funds, or fixed deposits, to derive income. This way, even if you are no longer alive, individuals who are financially dependent on you can lead the same lifestyle.
Protect Your Assets
It is possible that you have borrowed money to buy a house or vehicle. The term insurance will also reduce the burden on your family of repaying the loan after you. Your family will be able to repay pending loans with the help of the term insurance policy, and the assets that the policyholder has created after hard work will be safe and accessible to your family.
Reducing Lifestyle Threats
Death in the family affects their day-to-day life and the stability of their income. Term insurance does support financially in case of death but does not cover lifestyle ailments like heart attack or kidney failure unless a critical illness rider is added to the policy. It brings stability and fulfils financial needs in hard times, like death or critical illness, if appropriate riders are added.
Low Premium and Appealing Large Cover
The plan provides maximum insurance cover at an affordable premium. It also leaves your dependents with a handsome sum. The plan provides financial security without causing undue monetary strain. For example, buying a ₹1 crore policy at 25 may cost you about ₹6,000 per annum. But if you leave it until age 40, the premium may go up to ₹15,000 or even more annually.
Tax Benefits
The scheme provides exemption on paid premiums under Section 80C of the Income Tax Act 1961 and on the death benefit paid under Section 10(10D) of the Income Tax Act 1961. The death benefit is, however, liable to tax if the premium paid is more than 10% of the sum insured.
Securing Your Legacy and Your Family’s Future
The term insurance plan is an important aspect of the policyholder’s life. Amidst growing uncertainty in life and rising cost of living, this plan is an easy yet effective method of securing your family’s future. Selecting the right term insurance plan gives insurance and peace of mind as the heritage you wish to leave behind is a concern, not a crisis.
