Five reasons why you should take out term life insurance now

One of the harsh realities of life is its unpredictable nature. No matter how well we plan to live the life of our dreams, an unpleasant event such as a sudden illness, accident, disability or even death can affect not only us personally but our family as well.

The sudden loss of the family breadwinner not only has an emotional impact, but also a financial one that would be difficult for the family members to cope with. At such times, purchasing term life insurance can be a lifesaver. It provides quick financial protection for your family.

What is term life insurance?

A term life insurance plan provides the policyholder with financial protection for a specified period of time during which the beneficiary is entitled to receive the sum insured in the event of their death. However, if the policyholder survives the term, the premium paid up to that point will not be repaid. With this type of life insurance, the premium is lower, while the sum insured offered is quite high. For example, a rupee one crore term life insurance policy for a 25-year-old non-smoking male costs a premium of just rupees 8,364 per year.

Why should you buy

Provides financial security: A term plan is not an investment plan. It is an insurance plan that will help you build strong financial security for your family even after your death. In the event of an unfortunate event – ​​your death or disability, the family member – your nominated candidate – will receive a lump sum that can be used to cover their day-to-day expenses and, if necessary, pay off your loans.

Depending on the growing needs of the family, you can adjust the coverage amount. For example, if you get married at the age of 30 and plan to have a child at the age of 34, you can increase the amount insured depending on the phase of life and increasing responsibility.

Low premium rates: Compared to other types of life plans, term life insurance is affordable. For example, for a 30 year old, a Rs 1 crore term insurance plan for 30 years would cost a premium of Rs 10,000 per annum. Also, the premium for this type of plan stays the same throughout the life of the plan, regardless of your age.

Highly flexible: Term life insurance plan can be purchased both online and offline depending on your preference. You don’t need to undergo a health check if the coverage is less than 50 lakh, and you can also scale the plan to meet your growing needs. You can also change your candidate at any time in the future.

Rejection of low claims: This type of life insurance has a low claim denial rate, which means that unless you have not disclosed serious facts related to your health condition and lifestyle, the likelihood of a claim being denied is very low.

Equestrian: A term plan can be purchased with various drivers including premium waiver, permanent disability, critical illness driver, accidental death driver and others. This can help you provide better protection to your family.

Tax Benefits: This type of plan provides the policyholder’s proxy with a tax-free death benefit. Also under the Income Tax Act 1961, a policyholder can obtain tax deductions up to Rs 1,50,000 under Section 80C of the Act whilst the beneficiary can claim an exemption under Section 10(10)D for receipt of any amount insured as part of the Act Total.

Conclusion

For the above reasons, it’s clear why you should get term life insurance. However, you must buy the plan when you are young because the premium costs are lower and your family is also protected in the longer term. Never fail to pay your premiums on time and always disclose all the facts – this way your beneficiary will benefit from quick claims settlement.

(Viral Bhatt is the founder of Money Mantra – a personal solutions company)

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Published on: Sunday, May 15, 2022 07:00 IST

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