In today’s life of uncertainty, people always want to ensure financial protection for the family, so their loved ones don’t have to strive for the comfort and happiness they deserve. With the advent of nuclear families, there are lesser chances that other members of the family will provide you the financial support. With the continuous shift in lifestyle patterns and increasing inflation, it also becomes quite imperative to get a plan that helps your family to lead a financially independent life. If you are looking to secure your family’s future, it would be a wise move to buy a Term Insurance Plan.
A term plan is a pure protection plan that provides life cover to the insured for a specific period of time. In the case of an unfortunate event of your death during the policy term, a term insurance plan pays the Sum Assured as a lump sum or monthly income to the nominee. Being a pure protection plan, it is cost effective as well to ensure financial protection of the family.
Key Benefits of a Term Insurance Plan
When you take a prudent decision to buy a term plan, you can also receive these following benefits.
• Death Benefit: By buying a term insurance plan, your nominee is indemnified with a sum assured amount, in case of your untimely demise during the policy term. The death benefit ensures monetary support for your family, when you are not around. The death payout under a term plan is paid as a lump sum or monthly income, as applicable for your plan.
• Maturity Benefit: Typically, term plans do not offer any maturity value. Although, there are some term plans with ‘Return of Premium’ (TROP) that return all paid premiums at the maturity of the policy, in case of survival throughout the policy term.
• Tax Benefit: When you buy a term plan to secure financial future of the family, you also become entitled to receive tax benefits. The premium you pay for your policy can get tax benefits under section 80C, and the proceeds of the policy can avail tax benefits under section 10 (10) D of the Income Tax Act, 1961.
- Rider Benefit: You can also enhance the protection by opting for an additional protection called as riders like accidental death benefit, critical illness benefit, disability rider,etc. at an extra cost.
Key Points to Remember
• Buy Early: When it comes to buying a term plan, it is important to get a life cover at an early stage of life. It would be far better to buy a term insurance plan as soon as you starts earning and with an increase in responsibilities, you can opt for a higher cover.
• Life Cover: When you are looking to buy a term plan, you should choose a term cover that can help meet family’s huge financial expenses such as children’s higher education, marriage, paying off debts, etc.
• Policy Term: Prior buying a term plan, it’s important to choose a policy term during which you can pay off all your huge financial liabilities. Assess your liabilities and then buy.
In a nutshell, buy a life cover that provides an adequate financial protection for your family, so your family can lead a comfortable and financially independent life in case of your unfortunate demise.
