Why You Must Buy a Term Insurance Plan? How Is It Beneficial?

The coronavirus pandemic has changed your lifestyle. You cannot step out of the home without a mask and a sanitiser. Fatalities are on the rise and you need a life insurance plan. Why not avail the simplest and the cheapest life insurance plan? A term insurance plan secures your family’s financial future. You get the maximum protection at an affordable cost.

Term insurance plans are pure protection. The insurance company pays a benefit called the sum assured, only if the policyholder dies within the term of the policy. It has no survival benefit. If you nominate parents, spouse and children, they become beneficial nominees. Other heirs don’t have the right to claim the insurance money. 

Term insurance offers financial security to your loved ones. The loss of income on a sudden demise impacts the lifestyle of your family. You may have to repay a home loan, car loan or a personal loan. The insurance proceeds pay off your loans, protecting your family from the financial burden. 

A term insurance plan ensures the financial goals of your family are never in peril. The insurance money covers children’s higher education and marriage expenses. You may claim a tax deduction on the premiums of the life insurance plan. It is up to Rs 1.5 lakh under Section 80C of the Income Tax Act. 

How does term insurance compare with other life insurance plans? Well, the premiums are low when compared to other traditional insurance plans. Term insurance has no saving component, unlike an endowment or money back plan. It is a life insurance plan for protection against risk and offers maximum coverage at a low cost. You can avail term insurance for death cover and invest in other avenues. 

Also Read: Corona Kavach/Rakshak or Health Insurance – Which is the Best For You?

Term life insurance plans offer additional benefits called riders. You can take a critical illness rider along with the term insurance plan. The insurer pays the sum assured if the policyholder suffers a critical illness. You also have the accidental death rider and the income benefit rider. Pick only the additional benefits you need with the term insurance plan. 

You can buy a term insurance plan online, without having to step outside your home. Insurers offer online term insurance plans at a discounted rate, as compared to offline policies. The low administration costs and no commission paid to agents makes online term plans cheap. 

You can buy term life insurance from the insurance agent, even during the coronavirus pandemic. IRDAI, the insurance regulator in India, allows you to authenticate the life insurance proposals through electronic means. You can fill the application form, submit documents and even sign the forms with your mobile. It is possible through an OTP, dispensing the need for a physical signature. The new rule applies only to pure risk products until 31 December 2020. 

You must avail a term insurance plan if you are the sole breadwinner of the family. It protects your family’s financial future on a sudden demise. You have the option of an additional cover against critical diseases. It takes away the burden of loans from the shoulders of your family. It’s a cover in uncertain times.

For any clarifications/feedback on the topic, please contact the writer at cleyon.dsouza@cleartax.in

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