Why Is Term Insurance Important for Every Individual?

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As an earning individual with dependencies, you should have a term insurance plan to secure your loved ones. With a policy which enables you to choose the precise amount your family would receive is the safest kind of financial backup. It is always important to have alternate options available in case something were to happen to you. So, let’s understand the importance of purchasing a term insurance plan.

5 Reasons Why You Should Choose Term Insurance

Here are five reasons that explain why term insurance is a lucrative option when compared to other insurance policies.

1.   Affordable Premiums

When compared to other life insurance plans, term policies have the most affordable premiums. At lower prices, you can get a high life cover of up to INR 1 crore to satisfy the future of the family. This is not possible with other insurance plans, as getting a high sum assured would mean higher premiums.

2.   Flexible Plan

Term insurance plan is flexible when it comes to ending the policy. If you do not need the life cover anymore, you can stop paying the premiums. Nothing has to be given to you as there is no survival benefit and your coverage ends. But if you were to invest in plans that have a savings component, then ending a policy becomes tough. You can only avail the maturity benefit or the cash value if you hold the policy for the entire tenure.

3.   Simplicity

Term policies are easy to understand as it only contains a life cover, unlike other plans which have a cash value. There are many components in a term plan and can easily be understood by a layman.

4.   Tax Benefit

Not only does term plan give you a life cover but provides tax benefits under certain provisions. On purchasing a term policy, you can claim the premiums paid towards it for income tax deduction under Section 80C of the Income Tax Act, 1961. Also, another perk of insurance is that the death benefit and maturity benefit can be claimed under Section 10(10D).

5.   Insurance Rider

Riders are additional benefits that you can combine with your insurance plan to maximum coverage. You are able to safeguard yourself from unfortunate incidences like critical illness, and accidental death amongst others. With an extra sum, you can protect yourself and get rider benefits. These benefits exist over and above the benefits offered by your base policy.

Now that you are aware of the reasons why you should have a term plan, you should consider purchasing one from a reputed insurance provider. It is always advised to get premium quotes from various insurers so as to purchase the best plan that suits your needs.