Term plan is a life insurance plan to provide financial
protection to the family of the insured in case of death. Many of us delay or
avoid buying insurance not thinking what will happen to the family if some
unforeseen event takes place. If your family is dependent on you financially,
you should definitely get a term plan for yourself. Life is uncertain and by
buying a term plan you can secure your family’s future. Here are some of the
benefits of taking a term plan.
1) Protection
Term plan offers financial assistance to your family should
something unfortunate happen to you. They will be able to move on with their
daily activities without worrying about money crunch. There will also be no
compromise to your child’s future because the sum assured can provide for it.
2) High sum assured
at low premium
This is probably the biggest advantage of taking term plan
over other insurance schemes. You can buy a term plan at a very low premium as
compared to endowment plan and the sum assured offered is relatively high. Thus
it is extremely affordable to everyone. If you are young and non-smoker you can
avail it at even lower premium. Thus you will save lot of money which can be
invested in mutual fund, provident fund, fixed deposit, etc. or used for other
purposes.
3) Simplicity
Term plan is a pure life insurance plan; it does not have any investment component. Thus its terms & conditions are easy to understand. You just have to pay certain amount every year as premium and you will get the insurance cover for the term selected by you. One can easily by term cover through insurer or it can even be bought online.
4) Riders
Term cover lets you added riders to your policy that will give
you supplementary cover. This includes various options such as accidental death
rider, critical illness rider, disability benefit rider, waiver of premium
rider and income benefit rider. Some riders come in-built as part of the
insurance, while some have to be purchased separately.
5) Death/Maturity
benefit
While buying term insurance you have the option of either
selecting death benefit or maturity benefit. In case of death benefit, the
nominee will receive death benefit if the insured dies during the policy term.
In case of maturity benefit, the total amount of premium paid during the policy
period is paid at the end of the policy term.
6) Tax benefit
Premium paid towards term plan is eligible for deduction
under section 80C of the Income Tax Act.
Before selecting term plan of any company make sure to read
and understand each and every terms and conditions. Compare different plans and
choose one that will be best suited for your needs.
