Did you know the benefits of a term plan
Term plan is the most recommended pure protection insurance plan which secures the
financial future of your family at a low cost. By paying a low premium you can take
a big life cover. As term plans do not offer any financial benefits like payment
of sum assured or bonus etc. on maturity, the premiums are cheap for the term plans.
During the term of the policy, if something happens to you, your nominee is paid
the full sum assured. Securing the financial future of our family is the most important
goal of our lives and there is no other insurance plan which can match the benefits
term plans offer.
Benefits of a Term Insurance Plan:
Term Plans lets you have the highest life cover in lieu of a low premium. This is
possible as being a pure life protection plan; no ancillary benefits are attached
to it. If you compare the premiums of traditional life insurance plans with that
of term plans, you will find the premiums cheapest for the term plans.
You can take a term Plan for shorter tenure also. For example - You have taken Rs
50 Lakhs home loan for 15 years. You can protect that loan by taking a term plan
of equivalent amount for 15 years only. This ensures that during the loan period
if something happens to you, your family is able to retain the home by paying the
balance loan amount.
Lower premium if you start early
You should take a term plan early at the start of your career as the term plan premiums
depend on your age. If the age is lower and the policy term is high, the premium
will be the lowest.
Longer plan tenure
Generally term plans can be taken up to age 70, but some companies allow the life
cover up to age 80 years of your age. With growing life expectancy rate in India,
you should consider taking a life cover till the maximum age of 80.
Fixed premium during the tenure
Once your term plan is accepted against a certain premium, the insurance company
will not revise or change the premium during the policy tenure. This gives you certainty
as the life cover continues at the same cost even though you are ageing.
In case you are unable to pay your premiums due to financial difficulties, the term
plan does not stop but becomes 'Reduced Paid-Up', if you have paid premiums at least
up to 3 years. Once your policy is under 'Reduced Paid-Up', your sum assured, sum
assured on death and maturity sum assured shall be reduced in proportion to the
premiums you have actually paid against the total premiums that was payable during
the premium paying term. Therefore, the nominee will get the reduced sum assured
in case of death of the life insure.
Income Tax Benefits
You can avail a tax rebate on the premiums paid up to Rs 150,000 per annum under
Section 80C of the Income Tax Act 1961. The maturity benefits paid (in case of term
plans with return of premium and also in case of the death benefit paid to your
nominee) is also tax free under Section 10 (10D) of the income Tax Act 1961.
As we age and progress in our respective careers our responsibilities also keep
increasing. The utmost important things in life are protecting the family from unforeseen
circumstances by providing them with financial security. The premium you pay is
a very small price compared to the benefits attached to a Life Insurance Term Plan.
A term plan does that and thus you buy peace of mind.
Due to increasing awareness the Term Plans appeal to most of us and buying a term
plan online is the wisest thing as online term plans are even cheaper as it eliminates
the cost of a middleman.