Know These 8 Key Benefits of Term Insurance Plans

With rising inflation, advancing lifestyles, and growing cases of critical illnesses, buying a term insurance plan is the first step towards financial planning. Term insurance is a contract between the insurer and the insured for a specific period where the insurer pays a pre-determined sum insured to the nominee in the event of the policyholder's unfortunate demise. In return, the insured must pay a certain fixed amount regularly known as the premium to the insurer.

Term insurance is a protection plan that offers high coverage at low premiums. It is a type of life insurance plan that provides financial coverage to the nominee if the insurer dies and the policy is still active. This plan can help your loved ones manage their regular expenses if something happens to you and you are not around to earn a paycheck.

Benefits of a Term Insurance Plan in India

The best term insurance plans in India come with extensive benefits. Let us look at 8 key benefits offered by a term insurance plan:

·      High Sum Insured at Low Premium

Term insurance is the simplest form of life insurance. The most significant benefit of this plan is its affordable premium cost. Also, the sooner you buy a term insurance plan, the lower your premium rates will be. If you buy online term insurance, the premium may be lower compared to offline premiums.

·      Easy to Understand

The terms and specifications of various insurance plans may seem difficult to understand. On the other hand, term insurance plans are quite easy to understand. Term insurance is pure life cover, and there is no investment component in it. You just have to pay the premiums regularly, and the insurer will cover your life for a fixed period of time.

·      Multiple Payout Options

In your absence, the term insurance plan helps your family manage their regular expenses and financial liabilities such as EMIs for home, car, or loan instalments. Some insurance policies offer multiple payout options. The nominee can choose to get a lump-sum amount or receive monthly income as the death benefit. Choosing the monthly or regular income option may make it easier for your family to manage the expenses.

·      Riders

Riders refer to the add-ons to the term insurance plan. You will have to pay an extra premium amount to add them. Riders may include accidental death or disability, critical illnesses, etc.

·      Tax Benefits

You can avail of tax benefits under the best term insurance plan in India. The premium paid towards a term insurance plan is tax-deductible under section 80C of the Income Tax Act of India. Also, the death benefit is totally exempt under section 10(10D) of the Income Tax Act, 1961.

·      Critical Illness Coverage

Critical illnesses may be contracted during any stage of life, and the cost of their treatment can burn a hole in your pocket. You can choose a critical illness cover rider as an add-on to the regular term insurance plan. Your emergency hospitalization can be emotionally and financially stressful for your family.

Term insurance with critical illness cover can act as a safeguard against the rising medical inflation and bring you and your family peace of mind.

·      Coverage for Accidental Death

You can also add accidental death coverage as a rider to your term insurance plan. It helps secure the financial future of your family in case of any accidental death. The sum insured is paid to the nominee in a lump sum as per the terms of the policy.

You can even add the accidental death rider after the purchase of the term insurance policy. Make sure to read the policy documents before you add any rider to the term insurance plan.

·      Return of Premium Option

A term insurance plan offers life coverage to the policyholder in the event of the insured person's unfortunate demise, but it does not provide any benefit on maturity.

However, you can avail of the maturity benefit by choosing the return of premium option. You will be required to pay higher premiums if you opt for this option, but total premiums paid by you will be returned if you are alive by the end of the policy tenure. Although, the returned amount will not include taxes, rider premium, levies, and the modal amount.

The best term insurance plan in India can act as a safety net to secure your family's financial future. Therefore, buying a term insurance plan can be in your best interest. You can consider buying term insurance from a trusted brand like Max Life Insurance. The plan offered by them are affordable and come with extensive benefits.

Author Bio:

Vinod Gill is a writer who specializes in writing content on Insurance and Finance subjects. He is a Digital Marketing Consultant, Blogger, and Co-Founder of Journalreporter.