5 Reasons to get a Term Insurance policy

As an earning family member, protecting your loved ones in your absence is one of your prime goals. One of the best ways to facilitate it is by purchasing a term insurance policy.  

This type of life insurance plan  provides financial benefits  to the nominee in the event of the policyholder’s unfortunate demise. It comes with a fixed premium amount payable throughout a predetermined time period. In case of the policyholder’s death during the policy  period, the nominee receives the maturity benefit.  
  

Why buy a term insurance policy?

Buying a term insurance plan allows you to do the following:

Securing your family financially

One of the main reasons you should purchase a term insurance policy is to secure your family financially. By doing so, you can ensure that your family can easily manage their daily household expenses and existing EMIs, even in your absence. 

High coverage at low premiums

Term insurance policy premiums are usually low as these plans generally do not offer maturity benefits if you survive the policy tenure. 

Buying a term insurance plan at a young age enables you to get the policy at a low annual premium. 

Prepare for various situations via riders

Apart from untimely death, a term insurance policy also helps you prepare for several situations that can financially affect your family. You can add several riders to your existing plan like accidental disability rider, critical illness rider, and accidental death benefit. 

Tax benefits on term insurance premium

Purchasing a term insurance plan also lets you avail tax benefits. Under Section 80C of the Income Tax Act, you can claim a tax deduction of up to Rs 1.5 lakh for various investments, expenses and also life insurance premium. Additionally, under Section 10 (10D), your nominee can claim the maturity amount tax-free. 

Can help  prepare for retirement

Generally, the length of a term insurance policy ranges from 5 years to 40 years. Thus, you can choose a policy period depending on your retirement age. You can  get  financial coverage until your retirement . 

Takeaway

Now that you know what  a term insurance policy is and its importance, the only thing left for you to do is compare policies and purchase one as per your requirements. 

Disclaimer - This article is for information purposes only and should not be considered investment advice. Please consult your financial advisor and/or carry out your own research on any of your planned investments.