We all know how fickle life is and thus, we cannot ignore the advice that almost all financial consultants seem to give that is- buy term insurance as soon as possible. If one ponders about it, it isn’t a bad deal. A term plan does more than just provide life insurance. It assures that your family does not face financial difficulties while you are away and if the claim settlement ratio of a particular insurance company is high, it assures the claim process will be seamless.
While it is suggested that people purchase term insurance early in life, insurance companies now provide term insurance plans for senior citizens as well. In addition to protecting yourself, you can get a family term insurance plan to cover multiple members of your family for added security. In a world full of uncertainty, purchasing a term plan for your family may be the most prudent addition to your investing portfolio.
What is term insurance?
Insurance is frequently viewed as a difficult matter that discourages many potential customers from buying a term plan. On the contrary, term plans are one of the simplest types of insurance to understand and buy in India. In essence, term insurance provides financial protection to the insured for a set period of time by charging the policyholder a premium (determined by age and health). One can also know the premium beforehand as well using a term insurance calculator. If the policyholder dies while the term plan is active, the nominees receive the sum assured. Purchasing a family term insurance plan provides financial protection for your family and loved ones.
Term insurance plans include a variety of policy customization options to guarantee that you get the insurance coverage that best meets your financial goals. The following are a few alternatives for customizing term insurance based on the nature and scope of coverage offered:
- Level Term Plan: This is a simple and hassle-free insurance coverage in which the premium payment schedule, policy duration, and sum assured are determined at the time of application. These plans feature a set premium until the policy’s maturity. It is an excellent family term plan since it provides extensive coverage in the event of the policyholder’s unexpected death.
- Decreasing Term Plan: A family term insurance plan should account for changing responsibilities and liabilities during life. Given this, the coverage for this plan decreases by a certain percentage each year, yet the premiums are very small.
- Increasing Term Plan: Unlike the former, the sum assured for this term insurance plan increases by a specific percentage each year. How much percentage one needs to pay depends on many factors and the same can be calculated using the term insurance calculator.
How a Term Plan Protects Your Family?
A family term plan serves as a safety net, ensuring your loved ones’ financial well-being even when you are not present. Term life insurance can provide income replacement or help establish a fund for long-term financial goals. How much sum assured you should choose depends on various factors and to know whether the premium will be premium will be affordable or not, you can use a term insurance calculator. Here are some ways in which term insurance protects your family from unpleasant scenarios:
Financial Safety: One common myth about term insurance is that you only need it if you are married. However, you may have financial dependents even before marriage, and if you die unexpectedly, you may be left unprotected.
A term plan bought after careful consideration after taking into account the term insurance calculator and narrowing down the best insurance company on the basis of claim settlement ratio will ensure that your elderly parents, spouse, or children are not in a vulnerable condition if you are not present. It is also extremely useful for those who have responsibilities, such as a personal loan, in their name. You should choose term life insurance based on your financial status and lifestyle.
Comes with affordable Coverage: One of the most significant benefits of buying term insurance is that it provides a high level of coverage at incredibly low premiums which one can know in advance using a term insurance calculator. Some excellent ways to further reduce this cost include purchasing term insurance early in life, quitting smoking, and purchasing insurance online.
Senior Citizen Coverage: Contrary to popular assumption, senior citizens are eligible for term insurance. The term insurance plan for senior citizens is often a pure protection cover that includes a death benefit. Another thing to keep in mind is that a term insurance plan for seniors has a maximum entry age of 55 to 65 years, with a maturity age of 85 years.
Flexibility: To address the wide range of financial concerns, insurance companies now offer a variety of policy options for customization. There is flexibility in selecting different payment methods and options, as well as the policy’s terms.
Tax Benefits: Term insurance not only protects your family but also saves you money on taxes. Premiums up to ₹1.5 lakhs for term insurance are tax-deductible under Section 80 C of the Indian Income Tax Act. Section 10(10D) exempts the sum assured from taxes.
Comes with an option to add Riders: Riders further improve a basic life insurance policy by providing additional protection to the insured. They provide benefits in addition to the sum assured, subject to specified conditions. Critical sickness riders, for example, will pay you a lump payment if you are diagnosed with a critical illness. Alternatively, an accidental death benefit rider will cover accident-related costs.
In the end,
Term insurance policies provide numerous benefits, the most significant of which is to secure your family’s financial future. They are an excellent investment option due to their low cost. Just make sure when you are buying the term insurance plan in India, you take into various factors in consideration such as the claim settlement ratio of the particular insurance company, the premium chargeable and riders options available.
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