Term plan is a life insurance plan to provide financial protection to the family of the insured in case of death. Many of us delay or avoid buying insurance not thinking what will happen to the family if some unforeseen event takes place. If your family is dependent on you financially, you should definitely get a term plan for yourself. Life is uncertain and by buying a term plan you can secure your family’s future. Here are some of the benefits of taking a term plan.
Term plan offers financial assistance to your family should something unfortunate happen to you. They will be able to move on with their daily activities without worrying about money crunch. There will also be no compromise to your child’s future because the sum assured can provide for it.
2) High sum assured at low premium
This is probably the biggest advantage of taking term plan over other insurance schemes. You can buy a term plan at a very low premium as compared to endowment plan and the sum assured offered is relatively high. Thus it is extremely affordable to everyone. If you are young and non-smoker you can avail it at even lower premium. Thus you will save lot of money which can be invested in mutual fund, provident fund, fixed deposit, etc. or used for other purposes.
Term plan is a pure life insurance plan; it does not have any investment component. Thus its terms & conditions are easy to understand. You just have to pay certain amount every year as premium and you will get the insurance cover for the term selected by you. One can easily by term cover through insurer or it can even be bought online.
Term cover lets you added riders to your policy that will give you supplementary cover. This includes various options such as accidental death rider, critical illness rider, disability benefit rider, waiver of premium rider and income benefit rider. Some riders come in-built as part of the insurance, while some have to be purchased separately.
5) Death/Maturity benefit
While buying term insurance you have the option of either selecting death benefit or maturity benefit. In case of death benefit, the nominee will receive death benefit if the insured dies during the policy term. In case of maturity benefit, the total amount of premium paid during the policy period is paid at the end of the policy term.
6) Tax benefit
Premium paid towards term plan is eligible for deduction under section 80C of the Income Tax Act.
Before selecting term plan of any company make sure to read and understand each and every terms and conditions. Compare different plans and choose one that will be best suited for your needs.