Investing in a term insurance plan will be one of the best decisions you will ever make in your life. It is because it takes care of your family’s financial interest and helps them to maintain their standard of living even if you are no longer around.
You need to purchase an online term plan before investing in instruments, such as stocks, mutual funds, bonds, and Unit-Linked Insurance Plans (ULIPs). Investments are meant to gain significant returns in the long run. However, you know never know what lies ahead in the future. It is necessary to think about how your loved ones will take care of their expenses and achieve their life goals if an untoward incident leads to your absence. Therefore, it becomes essential to buy term insurance, as it provides much-needed financial stability to your family members in case of any eventualities with you.
Term insurance has become one of the most useful life insurance products available in the market today, as it offers various benefits. Here are the top four reasons that make term plans so popular:
- Monetary protection at a pocket-friendly cost
One of the best term insurance benefits is its affordability. People with any budget can purchase it and secure the financial future of their families. An online term plancomes at a nominal premium and offers a large sum assured. The high sum assured can help your family to live a financially stress-free and independent life. With this, they can maintain their lifestyle and need not compromise on their short-term and long-term financial aspirations.
- Possibility of a cost-effective premium for young policyholders
When you purchase term insurance plans right from an early age, you get them at a cheaper premium. It is because when you are young and healthy, the rate of mortality is low compared to an older individual. At a younger age, there is a lesser probability of you getting diagnosed with life-threatening diseases. So, when you invest in a term plan during an early phase of life, you get it at a budget-friendly premium.
- Ease in understanding
Term policies are pure protection plans, and as there no investment component and survival benefit involved, they are quite simple to understand. You only need to consider the three vital aspects of a term plan, which include its tenure, the sum assured, and premium. Apart from pure term plans, insurers offer various other types of these policies, which you can choose as per your requirements and financial objectives.
- Facility of the ‘return of premium’
Many people do not consider investing in term insurance because they feel that their money will be wasted if they outlive the policy duration. Return of premium (ROP) term plans are specially designed for such people. In such plans, if the policyholder survives the policy period, the insurer will return the premium paid to date. An ROP term policy is quite similar to a regular term policy. However, the only difference is that an ROP term plan offers survival benefits. Moreover, an ROP term policy comes at a slightly higher premium viz-a-viz a pure term plan.
Besides the reasons mentioned, there are other term insurance benefits offered by this policy. By investing in a term plan, you can avail of a tax deduction, as per Section 80C of the Income Tax Act, 1961. Here, the premium paid for the policy is tax-exempt up to INR 1.5 lakh per year. Additionally, the death benefit received by your family members is tax-free according to Section 10 (10D) of the Act.
Life is uncertain. So, do not jeopardize the economic well-being of your dear ones. Invest in a term plan today and safeguard their future.