Term plans – Valuable life savers!

Term plans – Valuable life savers!

A term plan can do so much in terms of protecting your family’s future interests. This article lists the reasons why you should invest in a term plan.

Buying life insurance has become necessary in today’s times, where you worry constantly about your family’s future in your absence. Among available life insurance products in India, term insurance is one of the best options to try – it can (literally) be a life saver for your family!

Consider the following reasons to take term insurance:

* It is one of the most affordable life plans.

Term insurance plans offer a high sum assured at a really low premium. This means that your family is adequately covered in the future without you having to burn a hole in your pocket in the present moment. Besides, the term plan offers amongst the highest sum assured amounts across insurance products in India today. Thus, this dual benefit is useful for those who do not wish to spend a high amount of money on insurance premiums, or who would like to get adequate life coverage for the interim till they buy another plan in the future.

* You can buy it online in a few steps.

Leading insurance providers in the country today offer customers the opportunity to buy term insurance plans online. Most insurers also do not insist on a medical test to complete the purchase process, since the premiums are low. Besides, you can pay the yearly premium online within minutes. Before you proceed to buy the term plan, do use an online term insurance premium calculator so that you can compute the sum assured vis-à-vis your age, income and desired premium amount.

* The premiums are not paid back – that’s the only drawback!

If you buy a term plan today that is unsuitable to your needs tomorrow, you can simply terminate the policy without going through a lengthy termination process. There is no maturity benefit on the plan, so when you stop paying the premiums, the plan is terminated at that point. Some insurance providers have a ‘convertible’ option on term plans, in which you can switch the term plan to an endowment plan in the future. Most people balk at taking term insurance plans because they do not return any of the premiums paid if you outlive the plan tenure. However, this is its only drawback – and it is a minor quibble, considering the high sum assured it provides!

* You get tax rebates.

You get tax benefits on term insurance plan premiums underSec 80C of the Income Tax Act, 1961. This benefit is counted cumulatively with other life insurance plans and investments.

* Your family can continue living the way they always have.

The high sum assured in the term plan helps your family continue its lifestyle, pay household expenses, fund children’s education and marriage, repay unpaid debts, etc. Thus, term plans can offer peace of mind to you by caring for your loved ones in your absence.

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