Life can be uncertain, and you can never know what the future holds. However, you can be sufficiently prepared for the uncertainties and safeguard your family future by purchasing a robust term plan. It is one of the most cost-effective ways to mitigate the financial problems that your family may face in the event of your sudden demise.
Let us look at the reasons why term insurance is a must-have for all:
Secures your loved ones’ future
The primary purpose of buying a term plan is to protect your family’s financial future. In the event of your untimely demise during the policy period, the insurance company pays the death benefit to your family.
Your family can use the amount to meet their everyday expenses and maintain their usual lifestyle. Also, since term insurance offers high coverage, you can be assured that your family never faces financial hassles for a few years after you are gone.
Flexibility to choose the premium payment mode
Most insurance companies give term insurance buyers the flexibility to customise the policy to suit their specific needs. You may have the liberty to choose the policy tenure, sum assured, and premium payment mode.
You can choose between regular premium payment, one-time premium payment, and limited payment options. In regular premium payment mode, you must pay the premium periodically. In a limited payment mode, you can pay the premium for a limited pre-determined period and enjoy the policy benefits for the entire tenure. If you choose the one-time premium payment mode, you can pay the premium for the whole term in a lump sum.
One of the most significant benefits of a term insurance plan is affordable premium. If you compare the premium with other life insurance products, you will find that you get a good coverage with affordable premiums in a term plan. Today, you can find a term plan with premiums starting at less than ₹15 per day.
One of the reasons why term insurance has an affordable premium is that it is a pure protection policy and does not have any investment or savings components.
Apart from offering financial protection to your family, term insurance also allows you to get tax benefits every year and reduce your tax liability. The premium you pay for the term plan is eligible for tax benefits up to ₹1.5 lakhs under Section 80C of the Indian Income Tax Act.
Also, the death benefit that your family may receive is entirely tax-free under Section 10 (10D) of the IT Act.
Flexibility to purchase riders
A standard term insurance plan only provides coverage against death due to natural causes or specific illnesses included in the policy. It may not cover accidental death or death due to critical illnesses like cancer, heart diseases, liver issues, etc.
However, the term plan gives you the flexibility to include coverage against such illnesses and accidents by purchasing riders or add-ons. Although the riders may come at an additional cost, it will help you get coverage against specific risks that are not covered in a standard policy.
A few common rider examples include critical illness rider, accidental death benefit rider, waiver of premium rider, etc.
Low risk of claim rejection
Most insurance companies in India have a simple claim approval process. If your term plan has been active for more than ten years, you can be assured that your family gets the claim approved without any hassles when the need arises. However, the key to getting the claim approved is to comply with the insurance company-specific processes.
Also, recently the IRDAI (Insurance Regulatory and Development Authority of India) has mandated that the insurance companies cannot reject a claim due to non-disclosure of facts if the claim is raised two years after the policy is approved.
Now that you are aware of the term insurance benefits, make sure that you get the cover for your family now and safeguard their future.