Term insurance plan offers insurance coverage in the form of the death benefit to the beneficiary of the policy in case of uncertain demise of the insured person. In today’s times, buying a term insurance policy is imperative as it ensures a secured financial future for the family in case of any eventuality.
Moreover, along with the benefit of financial security to the family, a term insurance plan offers plethora of benefits right from lower premium rates, additional rider benefits, etc. Let us briefly understand the term insurance benefits below.
Term insurance plans provide financial security to the family of the beneficiary in case of death of policy holder and also get optional coverage for critical illnesses or accidental death. Affordable premium, life coverage with financial security and income tax benefits is an important feature of term insurance plans.
However, to make the most of term insurance policy, it is equally important to know in regards to the benefits of term insurance so that with a plethora of insurance companies available in the market you can zero down the policy with the maximum benefits accordingly and buy the best term insurance policy.
Following is a list of term insurance benefits that a term insurance provide you:
Let’s talk in brief explanation of above term insurance benefits.
One of the key term insurance benefits is the whole life cover, which offers comprehensive security wherein the policyholder is covered up to the age of 99 years and more. A term insurance plan helps to reduce the financial burden on the family members’ case the breadwinner passes away.
When purchasing a life cover, it is better to take an in-depth understanding of the specified terms that are offered within the term insurance policy. Another term insurance benefit is that it is one of the easiest policies to understand. Moreover, as a term insurance policy is a pure life cover therefore it has no investment component within it. One needs to pay the premium on time and the insurance provides a cover for a fixed duration and provides different term insurance benefits.
When it comes to a term insurance plan, it is the simplest form of life insurance. The prime term insurance benefit is the pocket-friendly cost. When compared to any other type of insurance policy undoubtedly a term insurance plan is available at affordable premiums. The golden rule for buying the plan the earlier you buy, the lower will be the premium. Likewise, it is better to buy a term insurance policy online as the premiums offered will be low in comparison to buying it offline. Moreover, it is easier and convenient to check term insurance benefits online.
Someone might suffer from any critical illness at any stage of life. Moreover, the treatment expenses incurred towards these illnesses could easily exhaust the savings. Though this essential term insurance benefit is life cover, however, one can opt for a critical illness cover, which is mostly available within additional rider options wherein you will not need to pay for the incurred medical expenses and drain the savings. It is recommended to avail this term insurance benefit as you might be healthy now, but nobody knows what will happen tomorrow.
In case you are unaware you can strengthen the term insurance policy by opting various additional rider befits options. These additional rider benefits are available and are offered by almost every insurance company in India and one can include it in the policy by paying an additional nominal premium. These term insurance benefits will differ from one insurer to the other.
In case the policyholder passes away, the family will obtain the sum assured as the payout. Now, this payout can opt as a lump sum or an income that can either be received on a yearly or monthly basis. This way it helps the family to take care of the everyday expenses and manage it accordingly.
A term insurance policy does not provide any maturity benefit. However, you can avail maturity benefit within the same only when you have opted for the return of premium option wherein you need to pay high premiums that will be returned to you when you have survived the entire policy period. Although, the total amount for the premiums that will be returned will be excluding the taxes, rider premium, any levies and the modal sum that is paid upon the premium. You can also use an online term insurance calculator and take an idea of the estimate with and without the maturity benefits that will help you to make the prudent choice and likewise assess your needs as well.
The breadwinner of the family might be having various liabilities and paying EMIs for the same such as a car loan or a home loan and much more. So when the breadwinner of the family passes away, the liabilities will come on the family. It is here that this term insurance benefit will, play a pivotal role. With the multiple payouts, options the nominee will receive a lump sum amount and then this amount will be used to manage any such liabilities and so that the family lives in peace. One also has the option to obtain income each month alongside the lump sum amount that is the death benefit.
Last and not the least the term insurance policy also offers tax benefits within two various sections of the Income Tax Act. Within Section 80 C, you can access tax benefit upon the premium that is paid towards the term insurance policy. The premium that paid to the highest limit of Rs 1.5 lakh is eligible for tax exemption. Moreover, within Section 10 (10D) a maturity benefit provided by some of the term insurance plan and with special regards to the TROP that is Term Return of Premium Plan is also tax exempted.
A pure term insurance plan only offers insurance coverage in the form of the death benefit to the beneficiary of the policy. There is no maturity benefit offered by term insurance plan. However, specific plan such as TROP (Term Return of Premium Plan) offers maturity benefit in form of premium return in case the insured survives the entire tenure of the policy.
It is imperative to have a term insurance plan, if you are the sole bread earner of your family, as term insurance plan provides life coverage to the family of the insured in case of an unfortunate event. In case of an unfortunate event. It provides financial protection to family and take care of the liabilities in your absence. Thus, with a term insurance your family can be financially secured and maintain a good lifestyle even in your absence
This rider benefit is so significant because it manages a flat out, irreversible misfortune - the demise of the life assured. This implies his/her family is left to manage the grief and is currently likewise confronted with gigantic money related pressure. Unexpected medical costs are a monstrous cost as of now, and on the off chance that it ends up being deadly, the family needs to manage the death toll and future pay. The blow of this twofold risk of medical costs and perpetual loss of pay from the demise of the earning member can be facilitated through the arrangement of the accidental death benefit rider. The rider shields the family from mishaps/setbacks bringing about death, which can weaken the income of the family for a while or even years. In case of demise, the safeguarded gets an extra sum - normally, double the whole guaranteed.
Your premium is decided on age at which you buy the policy and remains same, throughout your life
Premiums can increase between 4-8% each year after your Birthday
Your policy application could be rejected or premiums increase by 50-100%, if you develop a lifestyle disease
With an extensive range of term insurance plans available in the market, the insurance buyers can choose to purchase a plan, which suits their requirements. A term insurance plan is the best way to ensure that a family has adequate financial coverage to deal with the uncertainties of life.
Moreover, the insurance buyers can also make use of term insurance calculator to determine the exact amount of premium they will be required to pay towards the policy.
Everybody believes nothing can happen to them, however, there is always an element of concern or risk, which prevails that, ‘What If?’ The term insurance is specifically bought to cover this concern of ‘What If?’ and all the financial trauma arising out of that risk.
The general thumb rule says a person should buy term insurance cover, which is 8 times the annual income, i.e., if I today earn Rs 5 lakh per annum then the amount of Term insurance Cover chosen should be around Rs 40 lakh. Many term insurance plans also offer you a possibility to increase your sum assured to an X% year on year, thus keeping you adequately insured.
To calculate a more accurate value you can log on to www.policybazaar.com and check your exact term insurance cover requirement by using our term insurance calculator.
With a plethora of term insurance plans available in the market choosing the right one becomes a task. However while choosing the best term insurance policy, look for various term insurance benefits.
This does not mean that you would require every term insurance benefit. Therefore you buy an online term insurance policy it is of utmost importance that you sit back and understand the requirements of the family. Once you know the requirements of the family it will be easy for you to look for the right term insurance benefits and accordingly you would include them in your policy.
At the same time, take note of the financial liabilities. On the premise of the liabilities look for additional rider options and choose the coverage that you would most require. A little knowledge in regards to anything is of no harm.
To buy the best term insurance policy it is equally important that even you are well-informed to make the wise decision. Make a thumb rule then when buying a term insurance policy the cover has to be minimum 8-10 time of the income you earn annually. If you wish to calculate the term insurance premium, you can easily use the term insurance premium calculator.
Although, term insurance is well-known for the affordable premium it offers, however, that does not imply that one has to neglect the term insurance benefits just because it will increase the premium amount.