A term insurance plan is the most basic kind of insurance that offers death benefits to the beneficiary in case of the sudden demise of the policyholder. Here’s outlining the major benefits associated with opting for such an insurance policy.
Top five benefits of opting for term insurance plans
#1 The easiest policy to understand
If you have no prior experience in buying an insurance policy or handling the related responsibilities, then a term insurance plan can be a good place to start. It is the easiest policy to understand. There are no investment components for you to figure out. All you need to understand, for starters, is that you get coverage for a fixed duration and must pay the premium on time every month.
#2 Extended coverage on offer
With term insurance, you can get whole life cover. It means that you can seek coverage up to the age of 99 if you want that. This insurance is one of the most reliable ways to ensure financial stability for your family in your absence. If not for 99 years, then most people get term insurance for at least 60 years because it helps them get a good amount of money to spend their retirement without worries.
#3 The affordability of insurance premium
The premiums of term insurance are lower compared to other types of life insurance plans. It is a pocket-friendly way to get yourself an insurance policy that will offer coverage for life. In fact, if you buy the term policy in your youth, then you can save even more on the premiums. There are many term insurance plans available. One such plan is HDFC Term Insurance.
#4 The tax benefits of term insurance
Term insurance policies come with a host of tax benefits, such as:
- Section 80C – Claim deductions up to INR 1.5 lakh for the premium paid towards term insurance plans.
- Section 80D – Health-related riders or coverage can help you claim deductions up to INR 25,000 on the premium.
- Section 10 (10D) – The entire insurance amount can get tax exemption under this section.
#5 The option to add the necessary riders
You can add different riders with a term insurance plan to make it even more helpful in times of need. For instance, you can add the critical illness rider that covers certain critical illnesses as per the policy norms. It will increase your monthly premium nominally but strengthen your policy even further.
What is the right age to get term insurance?
There is no denying that the best time to get term insurance is in your twenties. In other words, you should get the policy as soon as you start earning. At an early stage of life, you are typically in the prime of your health. You don’t usually have too many financial responsibilities to deal with. Thus, you can get the policy at an affordable rate.
But you can get the policy any time you want. Even when you are approaching retirement and have all the liabilities sorted, you can get a term plan as preparedness for any untoward incidents.