A term policy is a pure protection plan that provides substantial life cover at comparatively cheaper rates. Sometimes, cash value plans are not affordable, but there is a need for life insurance. If the younger person in the family is the sole breadwinner and has the responsibility of others, then the burden increases. In such cases, term insurance becomes beneficial as it comes with much lesser premiums and offers excellent death benefits.
It may sound that life insurance without maturity benefits is waste of money, but indeed, spending a little money on a term policy can save your family from suffering financial crisis if any unfortunate event occurs with you. India, being a highly populous country, facing several problems such as natural calamities, hectic routine, mental strains, and lastly fast-paced life. Here, the precaution has to be taken to secure your loved ones’ financial future due to several uncertainties.
Following are the benefits of a term policy in India.
A term policy comes at considerably cheaper rates than that of other cash value plans and whole life insurance policies. Especially when you buy a term policy online, several costs are saved, such as documentation costs, brokerage charges, and many more.
Though maturity or survival benefits are not provided, death benefits of a term policy are sizeably more significant than any other life insurance plan. This is the most significant benefit you get by opting for a term policy.
Usually, a term policy has a free-look period of 15 days to 30 days, wherein you can terminate the policy without any discontinuation/surrender charges.
The flexibility of choosing a term policy such as single life/joint life cover. Similarly, the type of payout and premium payment modes can be selected as per policyholder’s convenience.
A term policy offers the flexibility of converting it into a whole life insurance plan, without undergoing any medical test.
Tenure of the policy can be chosen within five years and 35 years. The premium rates are constant during the entire policy tenure.
Multiple riders are available along with a term policy such as critical illness, accidental death benefit etc. Riders are add-on benefits that come with a nominal increase in the original premiums.
Along with the regular term policy, you can choose ‘term return of premium’ policy that offers maturity/survival benefits with some additional premiums. If you are expecting maturity benefits from a term policy, TROP is always a better option for you.
Lastly, like all the other life insurance plans, a term policy also offers tax benefits. The premiums paid and the death benefits availed from the policy are eligible for tax savings under Section 80C and Section 10(10D) of the Income Tax Act.
To conclude, a term policy helps a lot in several ways. Today, several insurance providers have introduced their online term plans, which are more hassle-free than the traditional way of purchasing a term policy. Decide which term policy is best suitable for you, and make a wise decision by opting for the same policy.