Why you Must Have a Term Insurance Plan?

Life is uncertain and you never know what the future holds for you. You always want to ensure that your family remains financially secured, even when you are not around.

In the tough times of life, your family must be ready to fight against uncertainties and to tackle this scenario, you need to make sure your family has the robust financial security. Having Term Insurance works best for you.

Term Insurance – What It Covers?

Term Insurance provides financial stability to your family & loved ones. In the event of your unfortunate demise during the policy term, the life insurer will immediately pay the entire life cover amount (as a lumpsum or installments, depending the option chosen) to your nominee/ beneficiary.

In your term insurance, you must pick a life cover that can cover your family’s recurring expenses such as household expenses, paying bills, etc. Also, it should be able to meet your family’s future financial obligations such as children’s education & their marriage, financial expenses for your spouse and your parents, in your absence.

Browse Our Articles: Financial and Investment Planning Guide

Reasons to Buy Term Insurance

Here are the key reasons that make a term insurance plan worth buying. Let's go through the top reasons to invest in a term life insurance policy.

1.      Financial Protection

Buying a term insurance plan provides financial protection for your family & loved ones. Upon your sudden demise, the insurance company will pay the amount equal to Sum Assured (life cover). It helps your family fulfill their financial expenses and meeting other financial obligations. It’s always the best idea to invest in a term life insurance plan that takes care of your family’s financial needs.

2.      Low Premium

Term insurance offers only the life insurance and there is not any investment element involved in it. Considering this aspect, the insurance companies offer this life insurance product at a much lower premium than other insurance plans. The premiums of term insurance are extremely affordable that make it a must-buy insurance product.

3.      To Pay Off Debts

If you have taken any debts like home loan, car loan, etc., you need to make on-time payment of EMI’s. If you are the sole earning member of the family, it’s essential to get a term life cover. In case of your untimely demise, it becomes tough for your family to make re-payments. Having term insurance will help your family to pay off debts with ease.

4.      Flexible Tenure

Under term insurance, you have the option to choose the flexible policy term. Term plans are available with the tenure of as low as 10 years. You can purchase a term plan to secure your financial obligations. If you taken a debt such as home loan or personal loan, you can take the coverage with a term plan for a tenure equivalent to your loan tenure.

5.      Fixed Premium

Once the insurance company issues you a term policy, its premium doesn’t change during the entire policy term. So, premium once fixed, you don’t need to worry about any increase/ revision in the premium amount

By buying a term life insurance plan in your young age when you are healthy and fit, the insurance companies will offer it a low premium. So, you should get the life coverage as soon as you started earning, when you will get the comprehensive financial protection for your family at a lesser premium.

Also Read: Right Age to Buy Term Life Insurance

6.      Easy to Buy

When looking to buy a term cover, you can compare plans online, review the benefits, features, and coverage available. By comparing online, you can easily pick a right term insurance plan that offers you coverage at an affordable premium. When you have decided to buy a particular term insurance, you can visit the life insurer’s web portal to buy it online. Buying it online also provides additional discount than buying an offline insurance plan.

7.      Add-on Coverage

Depending on the financial protection you need for your family, you can choose buying a basic term plan or add riders to enhance protection for instance such as accidental death, critical illness, accidental disability, etc.

8.      Tax Benefits

The annual premiums that you pay is eligible for a tax deduction of Rs. 1.5 lakh under section 80C of IT Act. The death benefit (policy proceeds) paid to the nominee also qualifies for tax deduction under Section 10 (10D).