10 Reasons To Buy Term Life Insurance

Term insurance is one of the most popular types of life insurance plans available today. A great portion of its growing popularity can be attributed to the fact that it is a pure risk protection plan - it secures your family financially in your absence. So, you can live a stress-free life, knowing that there will be enough to take care of them.

In this article, let's look at a few reasons why you must consider buying term insurance. Let’s dive right in!

10 Reasons to Buy Term Insurance

1. Financial Protection Of Dependents

A term insurance plan is a great way to ensure your dependents (members who depend on your income for their living expenses) will have financial protection in your absence. If you pass away while the policy is active, it will pay a fixed sum to them

Your family can use this money to pay for their regular expenses such as grocery bills, electricity bills, as well as other expenses, like your child’s education or wedding expenses, etc.

2. Covers Loans And Liabilities

If you have loans or liabilities like an education loan, home loan, business loan, etc., and pass away before settling them, the burden of repayment would fall on your family. Imagine the financial hardships they would have to go through in such a case.

Term insurance can help safeguard your family from such loans/ liabilities. They can use the term insurance payout they will receive (if you pass away) to repay the outstanding loans/liabilities and get the burden of repayment off their chest.

3. Simple And Affordable Product

Term insurance is the simplest form of life insurance available in the market today. In exchange for the premiums you pay, it promises to pay a fixed sum of money to your family if you pass away during the policy period.

It is a pure risk cover and is easier to understand compared to other types of life insurance plans that combine risk cover with savings/investments. Further, it is also among the most affordable types of life insurance. The premiums are reasonable, allowing you to select a policy with sufficient coverage for your family.

For example, our ABSLI DigiShield Plan [UIN:109N108V13] will cost approximately Rs. 575/- monthly for a 21-year-old non-smoker female, cover of Rs. 1 Crore up to the age of 46 years.

Note: The premium figures are taken in December 2024.

4. Dual Tax Advantages

Tax benefits¹ for term insurance can be availed for both the premiums you pay and the claim your nominee will receive - under various sections of the Income Tax Act of India, 1961.

You can claim tax deductions on the term insurance premiums paid every year under Section 80C.

The term insurance claim amount your nominee will receive will be exempt from taxation as per Section 10(10D)^.

5. Added Risk Protection

Term insurance plans also allow you to select riders. Riders² are add-ons or optional benefits that offer added protection against certain risks like accidental disability, diagnosis of a serious illness, and so on. You can select riders by paying a nominal extra cost. And, you won’t have to undergo any additional paperwork or medical tests - beyond the ones you undergo for your base policy.

Here are a few riders provided by us, which you can opt for with your term insurance plan -

• Critical Illness Rider [UIN: 109B019V03]
• Accidental Death Benefit Rider [UIN: 109A024V01]
• Accidental Disability Rider [UIN: 109B018V03]
• Waiver of Premium Rider [UIN: 109A039V01]
• Surgical Care Rider [UIN: 109B015V03]
• Hospital Care Rider [UIN: 109B016V03], etc.

Example:

Sachit buys the ABSLI Salaried Term Plan [UIN: 109N141V03] for a sum assured of Rs. 1 Crore and a duration of 50 years. He also buys the ABSLI Accidental Death Benefit Rider Plus [UIN: 109A024V01] for a cover amount of Rs. 50 Lakhs along with the policy. In the 10th policy year, he passed away because of an accident.

In this case, his family will receive -

Accidental death benefit rider amount of Rs. 50 Lakhs.

Term insurance claim amount of Rs. 1 Crore.

So, his family will be paid a total claim of Rs. 1.5 Crores. So, these are a few reasons why you should consider buying a term insurance policy.

6. Income Replacement

If something happens to you, the death benefit received from the insurer can help your family by acting as an income replacement. They can use it for everyday expenses, pay off debts, or save for any significant life goals like your kids' education, marriage, etc.

7. Flexible Customization Options

With term insurance, you get to choose your coverage and policy duration. This means you can tailor the plan to fit your family's needs and financial goals.

8. No Investment Worries

Unlike some other types of insurance plans, term insurance is simple. There is no need to worry about investing your money or whether your investments will pay off. It is just straightforward protection for your family's future.

9. Start Early, Save More

The sooner you get term insurance, the less you will have to pay in premiums. Buying it when you are young means locking in lower rates and ensuring your family's financial security without breaking the bank.

10. Peace of Mind

Having term insurance means you can live your life fully, knowing that your loved ones will be taken care of if anything happens to you. It is a worry-free feeling, knowing that they will have the support they need, no matter what.

Looking To Buy Term Insurance?

Here are two plans you can consider buying -

• ABSLI Salaried Plan [UIN: 109N141V03]

ABSLI Salaried Term Plan [UIN: 109N141V03] is a tailored policy made just for salaried individuals. The plan is designed to give you the power to shape your own plan according to what you need. With options for lump sum cover or monthly income cover, you can choose what works best for you. Whether it is for education, everyday living, or any unexpected expenses, this pure risk term plan is built to give your family solid financial backing, ensuring they can move forward with confidence, even if you are not there.

• ABSLI DigiShield Plan [UIN: 109N108V13]

ABSLI DigiShield Plan [UIN: 109N108V13] is an ideal investment plan that provides a death benefit to your loved ones should you pass away unexpectedly during the policy period. A variety of features are included in this plan, including sum assured reduction option, increasing cover, whole life cover (up to 100 years of age), maturity benefit with return of premium option, and riders (Accelerated critical illness rider, Accidental death benefit rider, Accidental disability rider, etc.).

To conclude,

Term life insurance stands tall as a pillar of financial security. From replacing income to offering customizable coverage and policy duration, its benefits are clear. Its simplicity and affordability, coupled with tax advantages and the option for added risk protection through riders, make it a prudent choice. Ultimately, term life insurance promises support for loved ones, providing stability in uncertain times. It is a simple yet powerful tool for building a brighter future and securing your family's tomorrow.