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
Lowest premium - 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.
Lower tenure– 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 willbe thelowest.
Longer plan tenure – Generally term plans can be taken upto age 70, but some companies allow the life cover upto 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.
Policy continuation – 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 upto 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 insured.
Income Tax Benefits – You can avail a tax rebate on the premiums paid upto 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.