Term Insurance Benefits

A term insurance helps you in offering financial protection to your family members even in your absence. These are said to be the most crucial type of life insurance policies that one must purchase in today’s time.

As it not just offers financial safety to your loved ones during the most unfortunate times but also offers you with the tax benefits. Moreover, you can also avail various other benefits available under a term insurance plan.

Benefits of a Term Insurance Plan

Some of the benefits offered under a term insurance plan are as follows:

• High Sum Assured at Economical Premium

  A term insurance plan is one of the most popular forms of life insurance plans. The primary benefit of a term plan is that it is available at an economical premium rate when compared to other life insurance plans. Also, the earlier you purchase a term insurance plan, the lower the premium you will have to pay.

Must Read: What to Do With Your Term Life Insurance at the End of Term?

• Various Death Benefit Options

  It is possible that the sole bread earner of the family must have several liabilities like paying EMI for a car loan, home loan, etc. Therefore, when the bread earner of the family dies untimely, the liabilities would transfer to his dependents. This is when a term insurance plan would play a crucial role. With the option for multiple payouts, the nominee would get a lump sum amount and then this amount can be used in managing any such expenses or liabilities so that the family members can spend their life peacefully.

• Critical Illness Coverage

  An individual can suffer from a critical illness at any stage of their life. Also, the treatment cost incurred towards these illnesses can easily drill a hole in the pocket of the policyholder. Although the main benefit received from a term insurance plan is life coverage, a policyholder can opt to get a critical illness coverage by choosing riders/add-ons.

• Income Tax Benefits

  A term insurance policy offers the policyholder with income tax benefits. While the premium paid by you towards a term insurance plan is exempted from tax, the payouts also come with various tax exemptions according to the current tax laws.

- As per Section 80 C
According to the section 80C of the Income Tax Act, the premium paid by you towards a term insurance plan is exempted from tax up to Rs 1.5 Lakh per annum.

- As per Section 10(10D)
The death benefit paid towards a term insurance plan is exempted from tax according to section 10(10D) of the Income Tax Act.

• Maturity Benefits

  Under a term insurance plan, a nominee assigned by the policyholder receives insurance coverage in the form of death benefit. A term insurance plan generally does not offer any kind of maturity benefits to the policyholder. However, there are certain plans like TROP that provide maturity benefit in the form of returning the premium amount if the policyholder outlives the plan duration.

At the End

It is important for you to purchase a term insurance plan as uncertainties can happen anytime. Thus, by purchasing a term insurance plan you can offer protection to your family even in your absence.

Also Read: How Are Term Life Insurance Premiums Calculated?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.