Life is uncertain and no one can predict what the future holds. To make sure that your loved ones are financially secured in your absence, you can opt for a term insurance plan. Here we bring you different reasons why you should go for purchasing term insurance plans.
As compared to other life insurance plans, term insurance plans offer relatively lower premiums. This is because it provides only a life protection plan and no other ancillary benefits or investment elements are attached to it.
Simple to understand
Unlike other insurance plans such as endowment plans or unit-linked insurance plans (ULIPs), term plans are easier to comprehend and simpler in usage. You just need to pay the premium and your life will get covered for a certain amount.
Flexibility is one of the major advantages of a term plan. Usually, policyholders have to undergo several health-check-ups while purchasing a life insurance plan, however, most of the online term insurance policies do not require you to undergo multiple medical tests if the coverage amount is less than or equal to Rs. 50 lakhs.
Option to convert
This is another important feature which is often offered under term insurance plans. Under this option, the policyholders can convert their term insurance policy into another policy such as an endowment policy, depending on the change in conditions. It is important to note here that the conversion of your policy will be done only after taking into consideration some factors such as time duration, cost of conversion, amount to be converted, etc.
Provides larger cover
Another important benefit attached to the term insurance plans is that it offers high coverage at premiums which are affordable to the majority. It is due to this advantage; everyone can get adequate life cover not only for oneself but also for their loved ones.
Early mover advantage
The premium you pay for the term plan depends on your age and the policy term. If you buy a term insurance plan during your early life, the premium charged by your insurer will be comparatively lower.
Income tax benefits
The policyholders can also avail a deduction of up to Rs. 150,000 per annum under Section 80C of the Income Tax Act, 1961 in respect of premium paid. Also, the death benefit paid to the nominee/beneficiary (in case of unfortunate death) is tax-free under Section 10 (10D) of the Income Tax Act 1961.
Easy to buy
Buying a term plan is the easiest thing. You can compare the different term plans from different insurer websites and choose the plan which suits you the best. Remember, term plans bought online are cheaper than buying it offline directly from the insurance agents or brokers.
You can add riders
Most of the term life insurance plans offer some additional benefits, known as riders, along with death cover to the insured. You can choose riders like accidental coverage, critical illness coverage, the return of premium etc. at a little extra premium cost. These riders ensure that you get the maximum benefits of life cover without burning a hole in your pocket.
Customization policy tenure
When it comes to purchasing a term insurance plan, you can choose a policy tenure that meets your exact needs. Thus, if you are a 35-year old who is looking to purchase a policy that will provide you cover till your retirement, you can opt for a term insurance policy with a 35-year policy tenure. It is always advisable to purchase a term plan which has a long policy tenure since your premium rate will increase each time you renew your insurance plan.
Provides a sense of security
Purchasing a term insurance plan can also provide you with a sense of security and peace of mind. The death benefit received by the nominee upon your timely death can be used by them to pay off debts or meet their immediate financial needs.
Low claim rejection
In comparison to other life insurance policies, the claim rejection in term insurance plans is much lower. However, the insured must disclose all the correct details with their insurance provider that including your health habits and financials to ensure a hassle-free claim process.