Nowadays, people across society are gradually realizing the importance of having a life insurance cover. Moreover, the recent outburst of COVID-19 has impacted the lives of people worldwide.
Thus, in a situation like this having proper financial protection for your family and loved ones is a must. The best way to ensure that your family has an adequate financial backup in the time of any emergency or even in your absence is to purchase a term insurance plan for them.
As the experts suggest, you can opt for higher coverage like 1 crore term insurance plan to make sure all the future liabilities of the family are taken care of even in your absence. Also, with higher coverage, they can achieve the major financial objectives of life without any hindrances. Let’s read further to know the top reasons why you must invest in a term insurance plan.
The major reason why an individual opts for any type of insurance coverage is to provide financial security to their loved ones in the long-term. The unfortunate demise of the breadwinner of the family can take a toll on the lives of other family members both emotionally and financially. In such a situation, it can be difficult to manage household expenses and take care of the basic needs of the family. The term insurance plans are specifically designed to ensure that your family has the right financial protection in case of any such eventuality. Moreover, term insurance plans are also known as pure protection plans, which objective is to provide insurance coverage to the dependent family member in form of death coverage in the event of the unfortunate demise of the insured person during the policy tenure.
Low Premium Rates
As compared to any other life insurance policies, the premium rates of the term insurance plans are very low even though you choose to purchase a higher coverage of 1 crore term insurance. For example, a 30 years old non-smoker individual can purchase coverage of Rs.1. crore by paying a monthly premium of less than Rs.800. This is because, as term plans are pure protection plan only death benefit if offered by the policy in case of any eventuality, and no maturity benefit is offered under the policy. Thus, with a term insurance plan, you can provide the right financial protection to your family without burning a hole in your pocket.
Take Care of Debts
With the increase of age, the responsibilities of the individuals also increase. To fulfil the financial objectives of life almost every person has some or the other loans. It can be a personal loan, home loan, car loan, education loan, etc. In such cases, if the insured person dies the burden of the repayment of the loan can fall on the family member.
However, the term insurance plan takes care of the future liabilities of the family. The proceeds offered by the term insurance plan can be used to pay off the loans along with the interests and can ensure that your family lives a good lifestyle even in your absence.
Offers a Peace of Mind
In essence, life insurance is all about creating a safety net for your loved ones. A term insurance policy guarantees that in case of any emergency, the financial requirement of your family will be taken care of. This offers peace of mind to the individual and ensures that one enjoys his/her life to the fullest.
This is one of another major reason to include term insurance in your financial planning along with the benefit of insurance coverage term insurance plan also works as a tax-saving instrument. The premium paid towards the policy up to the maximum limit of Rs.1.5 lakh in a financial year can be claimed for tax exemption under Section 80C of the Income Tax Act. Thus, with a term insurance plan, you can provide financial security to your loved ones and can also save on taxes simultaneously.
Works as an Income Replacement
In times of emergency, the term plan acts as an income replacement for the family. For example, a married couple Vijay 30 years old is a businessman and his wife Shipra 28 is a homemaker. He purchases a term insurance policy and name Shipra as the nominee. In case of an unfortunate demise of Vijay, Shipra will not have to worry about the loss of regular income as the coverage offered by the term insurance policy will come to her rescue. She can also choose to avail of the death benefit as a lump-sum payment or as regular income and can continue to live her life fine.
Wrapping it Up!
As mentioned above there are various benefits offered by term insurance plans. It provides higher coverage, it is affordable, offers tax benefits, etc. However, before zeroing in on a plan keep in mind that the main objective of the term plan is to provide insurance coverage to the family and not savings. Thus, by keeping all these reasons in mind you can make an informed choice to purchase the right term plan for your loved ones.