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If you are wondering what is term plan, we are here to guide you about it. A term plan is a type of life insurance policy. The premium that you pay to your insurer for this plan helps you secure your family’s financial future in case of your unfortunate absence. In such cases, the insurer is liable to pay the sum assured to your nominees. No one can predict the future; so, it is essential to do proper financial planning today to ensure a better tomorrow.
When to invest in term insurance
If you plan to buy term insurance to secure your family’s financial needs when you are not around, you must purchase it at the earliest. The premium of your term policy will increase with age. Thus, it is advisable to buy such a plan when you are young to avail of higher coverage at a reasonable cost.
Importance of term insurance
Life is erratic and full of ambiguities; you never know what the future holds. If you are the sole breadwinner of the family, any untoward incident can disrupt the lives of your family members. Therefore, it becomes essential to invest in term insurance, as it is one of the efficient ways to secure your family’s financial stability. Also, term insurance provides you with substantial coverage at an economical premium. So, to ensure that your family does not have to go through financial distress in the future, you must buy a term policy now.
The death benefit, which the family members will receive will help them pay your liabilities and meet financial goals like children’s education and their wedding. In a term plan, your nominee will receive the sum assured only if something untoward happens to you while the policy is active. Your nominee can receive the sum assured in the form of a lump-sum, monthly payouts, or lump-sum with monthly income, as decided by you during the time of purchasing the policy.
Features of term insurance
A term life insurance plan:
- Provides life cover against the risk of death until the policy expires
- Protects the financial future of the family from the probability of any unfortunate incident during the plan’s tenure
- Offers riders (add-ons) at a nominal rate to broaden the scope of coverage
- Comes at an affordable premium for women and non-smokers
Advantages of a term insurance plan
- Secures the financial stability of your family when you are not around
- Provides high coverage at a reasonable premium
- Offers tax benefits on the premium paid as per Section 80C of the Income Tax, 1961
- Gives a tax-free death benefit under Section 10(10D) of the Income Tax Act, 1961
Who should purchase term insurance?
Anyone who is an adult and has a steady income flow can buy term insurance. However, you should purchase this plan without any delay if:
- You are the only earning family member
- You wish to secure your family’s financial well-being when you are not around
- You are looking forward to starting a family
- Your parents and spouse are dependent on you
- You want to meet your children’s life goals, like higher education, in the future
To make sure that your family members do not have to face financial challenges in your absence, invest in term life insurance depending on their lifestyle and monetary objectives.
Additionally, while purchasing a term plan, consider the riders (add-ons) offered by the insurer. Add-ons like income benefit, critical illness benefit, premium-waiver benefit, and accident benefit, among others, widen the coverage of your plan at an additional but cost-effective rate. So, choose the appropriate add-ons as per your requirements.
Do not waste even a single day in securing the financial well-being of your loved ones. Purchase a term plan immediately and heave a sigh of relief.
