Top Benefits of Investing in a Term Policy

Nowadays, financial security has become an essential aspect of life, and everyone's priority is to protect their family's financial needs and future. So, the solution to this problem is a term insurance plan that provides a policyholder's family with a full range of protection.

Though term policies have been among the most popular life insurance plans for years, COVID-19 adds more reasons why securing your family's future and financial protection are essential. Term policyholders have the right to choose how and when to pay their premiums to keep their policy active. If there is only one breadwinner, then keeping a policy in place becomes even more essential for protecting the family's financial needs.

What are the Top Five Benefits of Investing Your Money in a Term policy?

A life insurance plan provides financial security for your loved ones. You can also add riders and enhance your base coverage. Let’s explore 5 key benefits of investing in a term plan.

• Tax benefits

Investing in a term policy provides the advantage of tax reduction. Under Section 80C of the Income Tax Act, the policyholder can claim tax deductions on policy premiums of up to ₹1.5 lakh each year (under the old tax system). Other benefits include tax exemption under Section 10(10D) of the Income Tax Act, as per existing tax norms.

• Financial Security

The most common benefit of investing money in term insurance is future financial security. Under this policy, the nominee will receive a death benefit from a term plan that can quickly secure the nominee's family's financial goals in the absence of a policyholder member. This money can be used for children's educational and post-retirement needs.

• Affordable Premiums

Term insurance is the most affordable life insurance available in the market. Besides, securing a plan at an early age ensures long-term coverage at lower premiums.

• Debt Repayment

Under the debt repayment features, in the absence of the single breadwinner, their family will be able to pay off any outstanding debts or loans through a sum assured or death benefit under the policy plan. The insurance policy also ensures that the family will not be financially affected by the repayment of the loan in the future.

• Online Purchase

In the digital age, anyone can buy life insurance anytime without considering geographical restrictions. Nowadays, term policy plans are readily available online from various service providers. However, it is important to conduct thorough research on the insurer’s reliability and claim processes to ensure a hassle-free experience

Conclusion

In today's market, there is a wide variety of term insurance products available that offer multiple benefits. So, before buying any policy plans, always do research and compare different plans that provide the maximum benefit to people. The policy depends on various factors, such as an individual's financial circumstances, medical history, age, and the number of dependent people.