The role of term insurance in ensuring your financial stability is undeniable. From paying a large sum as the death benefit to the beneficiaries to paying all paid premiums back on survival (TROP), term plans are the need of the hour. So, if you are planning to purchase a term insurance plan for your family, this blog is for you.
Top 8 Benefits of Term Insurance Plans
Go through the following points to find out the various advantages of a term insurance plan:
1. Affordable Premiums
Term insurance is one of the most common and affordable life insurance products. It provides a high sum assured at affordable premium rates. These premium payments can be made at any frequency of your choice—monthly, quarterly, semi-annually, or annually.
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2. Better Financial Protection
Most reputed term insurance companies offer reliable options through which policyholders can increase their term insurance coverage during critical phases of their lives. For instance, policyholders can increase their life cover, change policy tenure, etc., as life evolves. This promises better financial protection in the long run.
3. Multiple Death Benefit Payout Options
Term insurance providers offer different payout options through which the beneficiaries can receive the sum assured. These include monthly, quarterly, and annually, in the form of a lump sum, regular source of income, or an increasing income at the beginning of the payout. You can choose any one of them based on your preferences.
4. Acts as an Income Replacement
The sum assured or death benefit of a term insurance plan also acts as an income replacement tool when a regular source of income is lost. Thus, after the policyholder’s untimely demise, beneficiaries can receive the large sum as a lump sum or as a monthly income.
5. Accident Insurance Benefit
Term insurance plans also come with riders or add-ons, including the accidental death rider. Including this rider can help your dependents stay financially protected in case you come across any accident and pass away prematurely.
6. Critical Illness Coverage
Another one of the major riders of a term insurance plan is critical illness coverage. Including this rider in your term plan ensures you receive a lump sum payment in case you are diagnosed with a critical illness that is covered in your existing plan. Considering the uncertainties life is surrounded with, this rider can be beneficial to manage your finances during an impending illness.
7. Tax Benefits
Investing in term insurance policies can earn you tax benefits under Sections 80C and 80D of the Income Tax Act. These benefits can reduce your taxable income, potentially leading to significant savings on your overall tax liability.
8. Comes in Different Types
Term insurance plans are also available in different types to suit people’s varied preferences. These include level term plans, increasing term plans, decreasing term plans, convertible term plans and term plans with return of premiums.
Final Words
Many individuals dream of a financially secure future, but only a few know how to achieve it successfully. As the wise breadwinner of your family, you must consider taking the necessary steps. To achieve this goal, purchase a term plan from a trusted insurance provider today and protect your loved ones.
