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Is it Good to Buy Term Insurance Plan in 2021?

As important is earning, likewise, it is important to have an investment planning as well. If you are an earning individual, then the safety and security of the family are of your prime concern.

Therefore, it is important to include a term insurance policy in your investment portfolio. Buying a term insurance policy is no more a daunting task rather you can buy an online term insurance plan that fulfils your insurance needs and make a wise choice.

Understanding Term Insurance

Well, in simple words, a term insurance policy is the preferred life insurance product that would offer a death benefit, in case the policyholder is no more. Investing in a term insurance plan is ideal as it is one of those investment options accessible in the market, which offers high sum assured at pocket-friendly term insurance premiums. Moreover, it is important to invest in a term insurance policy as any eventualities will not come with prior notice. In case you are not around someday, the family will have to cope with the financial loss as well. A term insurance policy will be there to take care of the family’s financial needs.

The earlier you start the safer you will be and will give your ones the financial support at any uneventful point in time. A term insurance plan will help the family to meet their day to day expenses and accomplish the long-term financial goals too.

Yes, it is worth buying a term insurance policy no matter what year it is. When compared to other types of life insurance products, a term insurance policy is much beneficial. In case you do not want to get into too many hassles you can easily buy an online term plan right from your comfort and avail it at a special price.

What are the Benefits of Buying Term Insurance Policy?

Let us quickly understand some of the following benefits of buying a term insurance policy:

Simple to Understand

The term insurance plans are simple to understand. This is one of the key reasons why a term insurance plan remains a preferred option amongst all individuals. The term life insurance is essentially a pure life cover that focal points on offering the immediate dependents the sum assured in case the insured passes away. However, it is of utmost importance to pay the term insurance premiums on time. Term life insurance policy, then again, is the substance of effortlessness - pay the premium and get secured for the term picked.

High Sum Assured

As discussed above, term plans are the simplest form of life insurance. Another key benefit of having a term plan is the pocket-friendly cost. Compared to any other policies, the term plan is easily available at a premium that is not heavy on the pocket. The early you buy the term plan, the lower will be the premium amount. It is recommended to buy the term plan online as the premium offered will be low when compared to buying offline. In simple words, the cost-saving, which happens from the end of the insurer, is transferred to as a benefit of the term plan.

Tax Benefits

The primary objective behind buying a term insurance policy is to secure the financial future of the family. However, another key benefit is to save taxes. Listed below are some of the important tax benefits:

Section 80C

Under this, an individual can easily claim a deduction of up to Rs 1.5 lakh, which also includes the premium amount paid towards the plan.

Section 80D

This exemption is permitted on the paid premium towards health-related coverage such as critical illness rider. A claim deduction of up to Rs 25,000 can be done for the premium that is paid towards it.

Section 10 (10D)

In the case of a term life insurance plan, this benefit can be easily claimed during the payout claiming. The complete amount remains tax-exempted.

Note: Tax benefit is subject to changes in tax laws.

Factors to Consider When Buying a Term Insurance Policy

Now, let us quickly understand the following important variables that should be considered before you buy an online term insurance plan:

Understand the Coverage Needs

Before you buy the term insurance policy, it is important to assess the insurance needs of your family and your close ones. This will help to accordingly opt for insurance coverage that will be required in case the policyholder is no more.

Determine Policy Tenure

Now, once you assess the insurance coverage it is time that you determine the tenure, which means up to what age the policy will be needed. The policy tenure neither should be too long nor should be too short.

Right Choice of Add-ons

Yes, term insurance plans offer additional riders so do not hesitate in opting for a rider. It will only enhance your policy by making it more secure. The term insurance riders are available at a nominal cost so make the best of it.

Look for Claim Settlement Ratio

Needless to say, when buying any sort of insurance policy, you must look for the claim settlement ratio of the insurance company. The claim settlement ratio will give you a fair idea of the efficiency of the insurance company in settling the claims.  However, it does not mean that you make it a sole criterion of making your decision.

Wrapping it Up 

A term life insurance policy is an agreement between the insurer and you. It is going to be an investment, which will not just secure the future but take care of your loved ones financially.

Therefore, it is prudent that you invest your time, research about the available plans online before you zero down a term insurance plan. You can also save money by simply buying a term insurance plan online from anywhere around the globe.

Written By: PolicyBazaar - Updated: 19 May 2021
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
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