How to choose right tenure in Term Insurance?
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Term insurance can also be referred to as a term life insurance plan and it mainly provides higher coverage for life at lower rates of premium. This term insurance plan mainly provides compensation to the dependents of the policyholder in case of the policyholder’s untimely demise.
Why Should One Buy Term Insurance?
Term insurance is a worthy investment and the reasons for the same are listed down below:
- Death Benefit
This term insurance mainly provides the nominee with the death benefit in case the policyholder meets with an unforeseen death during the tenure of the policy. This helps the family in remaining stable financially and also meet financial liabilities in case there are any. Thus, the family is not burdened financially.
The idea that the family’s future is safe and secure despite your demise gives peace of mind to the policyholder. This term insurance is an assurance that the policyholder’s family will not be forced to suffer nor compromise on their living standards due to the sudden demise of the policyholder.
- Financial Independence
The family enjoys financial stability and independence despite the demise of the policyholder. In case you decide on taking term insurance with return of premiums (TROP), you will also be able to receive an amount that was assured on the maturity of the plan if you survive the entire policy term.
- Tax Benefits
Term insurance helps in the deduction of taxes as it qualifies to fall under the heading of Section 80C of the Income Tax Act according to Section 10(10D), the sum assured (SA) which is received in case of death or maturity of the plan is eligible to be exempted from tax. This is the case when the premium is approximately 10% of the sum assured or the sum assured is ten times more than the premium amount.
- Life Cover Benefit
A number of term insurance policies provide entire life coverage with standard term plans. This helps in enjoying the benefits offered by life coverage policies till the age of 99 years. This helps largely in keeping worries at bay and enjoying life without many worries.
- Pocket Friendly
Term Insurance policies are known to provide high life term insurance coverage at an extremely affordable premium. This would help you in securing your future and that of your family with an amount that can go up to 10 Cr. or more than that for premium prices that are extremely nominal. It is this affordability that makes the best term life insurance.
Choose The Correct Tenure For Term Insurance
There are a number of term insurance policies which provide several options for pay out thus providing several benefits based on the stages of life. It is thus important to choose a term insurance plan wisely in order to get the best outcomes.
- As a Young Single Person
As a working single individual, it is essential for you to have a term plan that would protect your parents after their retirement. In case you have a sibling it is often advised that your term plan must also provide a protective coverage to your sibling. In this case a single payment pay out should be selected.
- Married but does not have children
By getting the best term insurance plan, you could make proper arrangements for taking good care of your partner in your absence. A term plan that would give your partner a definite sum of money in addition to their monthly income comes handy in this kind of situation. Another good alternative is to avail a term insurance plan which would provide an increasing monthly income along with a basic life insurance. This would help the family in enjoying the financial benefits of the plan without being bothered by the inflation.
- Married and has Children
It is the dream of every parent to provide their children with all the resources that they would require to succeed. This is why your term plan should have cost coverage for a range of things which would include costs for higher education, marriage and lifestyle demands. It is thus important to choose a term insurance policy that would have enough costs coverage to meet all the expenses. This coverage should be at least twenty five times your annual salary.
- Would Retire Soon
You intend to accumulate sufficient money while working to cover your retirement. You would like to enjoy your golden years without having to worry about money. Purchasing a standard term insurance plan will not assist in this scenario because it offers no maturity benefits. The term plan with premium reimbursement option could be a better option.
- Diagnosed with Critical Illness
A serious illness could indeed cause you to splurge all of your cash reserves on necessary care, no matter what stage of your life. It will also put a financial pressure on your household while they look after your health.
One way to avoid this is to select this rider while purchasing the best term insurance policy for the family. If you are suffering with a life-threatening clinical condition during the policy’s term, the rider will charge you a certain amount. If you have a significant amount of money, you can select the best treatment without compromising on your savings.
Term insurance is critical for providing financial stability to your dear ones in the case of your death, which would lead to a loss of income. If you think about it, losing your job could also mean that your family’s arrangements for things like wedding or your child’s higher education are compromised. Furthermore, if you have debts to repay, such as a personal loan or a car loan, your family would be obligated to make the pay-outs in the event of your early demise. All of these situations can be covered by insurance policy for your family.
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