In today’s hustles and bustles of life, it is essential for a bread-winner of the family to plan a financial backup for his/her near-dear ones. Buying the term insurance policy offers plenty of benefits to the beneficiary family. It is a protection plan that provides financial stability to beneficiary family members in case of unexpected circumstances. Term insurance plans are pure insurance products designed particularly to protect your family against unforeseen situations. Furthermore, one can even opt for different riders available with term insurance, which boosts its applicability. Understanding the term insurance and its benefits is the very first step to buying term insurance. So, let’s explore the key term plan benefits.
- High life covers, lower premiums:
It has a low cost as compared to permanent life insurance. Realistically, the premiums are more economical when you buy it at a young age. Furthermore, the cost can be reduced by only buying enough coverage for specific needs. While in order to find the best term insurance policy and what premium one will need to opt for, a term insurance calculator can spell several benefits. A term insurance premium calculator helps in finding rates, policies, and makes it easy to calculate the exact coverage needed and also the total amount of premium.
- Simplicity:
It is very easy to understand insurance product. It doesn’t have an investment component. The policyholder pays a premium at regular intervals (quarterly/half-yearly/yearly), and the insurer agrees to pay the sum assured of the policy to the nominee in the event of the premature death of the insured. However, if the policyholder survives the policy terms, it does not offer any survival or maturity benefits.
- Tax benefit:
Buying a term insurance policy also spells an added advantage of tax benefit under Section 80C. In addition to this, the sum assured that nominees receive post death of the insured is also tax-free under Section 10 (10D), of the Income Tax Act.
- Flexibility:
One can easily opt for an online or an offline term insurance plan. Moreover, term life insurance policies can be easily renewed (extend the policy period without a medical examination at the end of the previous term insurance policy) and converted (change the term life policy into an endowment policy for the same insured sum with an increase in the premium.)
- Insurance Riders:
Term insurance policies come with optional riders that augment the benefits of a basic term insurance plan. With a nominal addition to the premium, one can opt for insurance riders that offer additional benefits over and above a basic policy. This can be beneficial in the case of a specific occurrence such as an accident.
