6 Reasons to Buy a Term Insurance Plan in India
With inflation rising, critical illnesses on the rise, and lifestyles changing, investing in term insurance is the first step toward financial planning. A term policy is a contract between the insurance company and the insured. A predetermined sum is paid to the family of the insured by the insurer in the event of the death of the insured. In return, the insured must regularly pay a fixed amount of premium.
Purchasing term insurance with adequate coverage is essential to help your family deal with financial obstacles in the future. The term policy is an economical, easy-to-purchase life insurance plan to protect your family’s financial future at low premiums.
Benefits of a term policy
Having term insurance can be vital in today’s era, and its importance cannot be stressed enough. A temporary policy has many advantages. Here are some of the major benefits provided under a term policy:-
– Affordable premium
One of the most important benefits of a term policy is its affordable premium rates. It is available at lower premium rates than other life insurance policies. Plus, the premiums would be even lower if you bought it early in life.
– Easy to understand
People generally find terms related to insurance difficult to understand. But a term insurance policy is very easy to understand. The framework of this life insurance contract is simple, which makes it one of the safest investments.
– Several payment options
If you purchase term insurance, you can opt for a regular payment option, where the candidate will be paid regularly, instead of a one-time lump sum. This is a useful option if you feel that your family may not be able to handle a large amount of money.
– Additional runners
Riders are supplements to a standard term insurance policy. This can help improve your insurance plan coverage. You may have to pay a little extra on the premium to add them. Riders can include coverage for critical illness, disability, accident, and more.
– Fiscal advantages
Under a term policy, you can avail tax deductions on the premium paid under Section 80C of the Indian Income Tax Act 1961.
Image source: Stutterstock
6 reasons to buy term insurance
1. Lower premium
Since a term policy has no investment element, the premium for a term contract is usually lower than for other insurance plans. The premium for the term plan also depends on your age. If you buy term insurance early in life, your premium will be even lower.
2. Financial Security
An untimely death in a family can be both emotionally and financially distressing. Investing in a term policy can help meet the financial needs of the family.
Flexibility is one of the main benefits of term insurance. It allows you to modify and customize your duration policy according to your needs. You can make premium payments at your convenience by choosing between monthly, quarterly, semi-annual or annual premium payment frequencies.
4. Low Claim Rejection
When taking out term insurance, it is crucial to provide correct information about your health, habits, finances, etc. According to the Insurance Regulatory and Development Authority (IRDAI), insurance companies are not allowed to claim that there was disclosure of information after two years of purchasing the policy.
5. Long-term hedging
A term policy in India provides long term coverage. You can purchase term insurance up to age 70. However, some insurance companies may also allow you to purchase coverage until age 75.
6. Premium refund option
If you buy term insurance, the policyholder can get coverage for his or her death. But a term policy does not provide any benefit at maturity. However, you can benefit from the advantages at maturity if you choose the return of premiums option. You will have to pay a higher premium, but the full amount of the premium will be refunded to you if you are alive at the end of the policy term.
Having term insurance is essential because it can act as a safety net to secure your family’s financial future. After understanding “why buy term insurance?”, be sure to read the policy documents carefully before purchasing a term policy. The benefits and features offered under the policy may vary from company to company. And with so many options available on the market today, choosing one from so many can be difficult. You can purchase term insurance from Max Life Insurance. The term insurance plans they offer are affordable and have many benefits.