Why You Should Invest In a Term Insurance Plan?

By siliconindia  |  Saturday, 16 January 2021, 06:36:48 PM IST

Why You Should Invest In a Term Insurance Plan?

People are increasingly realizing the importance of life insurance. Our fast-paced life and growing uncertainties have made it imperative for every family to invest in a proper life insurance plan. A term insurance plan is one of the most effective insurance policies out there. Here are the reasons why you should buy a term insurance plan:

  • Low Premium Amount

One of the biggest advantages of a term insurance policy is the low premium that it offers. When you take a term insurance plan at an early stage of life (the early 20s), you pay a significantly low premium. And as you grow older, the premium remains the same. So even though your financial capabilities increase, you continue to pay a small amount of premium. You can use a term insurance calculator to determine the premium that you will be paying. Considering that the premium is locked, you pay less overall. Therefore, when you purchase the term insurance plan at an early stage, it means you get to save a substantial amount of money over time.

  • Tax Benefits

When to buy a term insurance plan, you get to leverage three tax benefits that include:

  1. Section 80D: It allows you to claim an exemption on the premium paid towards coverage related to health, such as critical illness riders. You get to claim a deduction of up to 25,000.
  2. Section 80 C: You can claim the tax benefit on the premium you pay for the term insurance plan. Under this section, you can claim a deduction of up to 1.5 lakh on specific purchases and investments.
  3. Section 10 (10D): Within this section, you can claim the tax benefit when claiming the policy after the deal of the policyholder. In this case, the entire amount is exempted from the taxes.
  • Lower Tenure

You can buy a term insurance plan for as low as ten years. Shorter-term plans are a great option in case you have debts such as a personal loan or home loan. You can take a term loan for the amount proportionate to the home loans. This makes sure that if something happens, your family will be able to retain your home by repaying the rest of the loan amount.

  • Benefits Of The Riders

These are additional benefits that feature term plans to cater to the requirements of the policyholder. You can purchase riders at a nominal fee based on your requirements. Some of the popular riders include:

  1. Death due to accidents
  2. Critical illness
  3. Permanent disability
  4. Partial disability

Final Thoughts

There you have it, some of the best benefits that can compel you to invest in a term insurance plan. Today, a lot of insurance companies offer term insurance plans with different features. But make sure that you do thorough research on each of the offers and compare the value before choosing the right policy for you. When you choose the correct term insurance plan for yourself, you will be able to get more benefits from the same.

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