To have a seamless life, it is not only essential to be earning, but it is also necessary to have a financial backup for our family and us. We never know when we come across an untimely event, such as the unfortunate demise of the earning member or an accident leading to a disability that might restrict us from earning. Having a financial safety net ensures that you and your family and not clueless or face any financial constraint in such unforeseen and unfortunate events. We often wonder if we are suitable candidates for investing in a term insurance plan or will it benefit our loved ones in the long term.
Here is a complete guide on the answer to your question of whether investing in a term insurance plan is the right choice for you. Let us start by understanding what a term plan is.
What is a Term Plan?
A term insurance plan is a legal contract between the policyholder and the insurance providing agent wherein the policyholder pays premiums to the latter in return for death benefits. In simple words, a term insurance plan provides the policyholder and his family financial safety net and ensures that his family are financially secure, even if he is not around to provide for them. A term insurance plan is much more beneficial compared to other insurance policies. Moreover, you can also choose to invest in a term insurance plan online at the comfort of your home and without any inconvenience.
Let us now see why investing in a term insurance plan is the right choice for you and your family.
Benefits of Investing in a Term Insurance Plan
- Simple and Easy to Understand
Compared to other insurance policies, a term insurance plan is the easiest and the simplest to understand. While other insurance policies often involve an investment component, a term insurance plan does not involve any investment component, making it easier to understand for the policyholder.
- Tax Benefits
Another benefit of investing in a term insurance plan is the death benefits it offers. The policyholder can claim up to Rs. 1.5 lakhs of tax benefits on the premiums he has pain under one financial year. The benefit of tax deductions comes under Section 80C of the Income Tax Act, 1961. However, tax benefits are subject to change from time to time.
- Lump-Sum Amount of Returns
A term insurance plan offers a lump sum amount of return to the policyholder and his family. It ensures that they are financially secure and are able to achieve all their goals. Moreover, it also helps the policyholder and his family to fight inflation and have a seamless life even in the rising cost of living.
- Affordable Premiums
A term insurance plan is cheaper and has more affordable premiums than other insurance policies. This ensures that anyone and everyone can investment plan in this policy without thinking twice.
- Covers Major Illnesses
No one knows when they or their loved one may get diagnosed with a critical illness. This can be financially and emotionally draining for the policyholder and his family. But we for sure know that the cost of medical expenses has risen in the past few years. A term insurance plan financially covers the entire treatment of the majority of critical illnesses and ensures that you do not have to face any financial constraints. Moreover, you can be at peace of mind and can focus on your recovery.
Term insurance gives you and your family financial security and the ability to meet your financial requirements without any hassle. Therefore, the answer to whether you should invest in a term insurance plan is a big yes. Whenever we plan to invest in a term insurance policy, it is essential for us to go for an insurance company that is trusted and has a good claim settlement ratio.