The protection and safety of loved ones is the utmost priority for anyone, especially when there is only one earning member in the family. If that member were to pass away suddenly, the family would go into a financial turmoil without any other source of income. To be able to provide financial security to your family in your absence is possible with the help of term insurance. Like anyone else, you must be wondering what exactly is term insurance? And how can it help you in giving your family a financially safe future? Read more to find out.
A term insurance policy is a type of life insurance policy. In this policy, your insurer compensates your family with an amount known as the sum assured. The amount that will be given to your family will be based on the plan you select. This amount is given to your family if you were to pass away suddenly. The nominee will file a claim following which the sum assured will be disbursed. This amount will be helpful for them in managing day-to-day expenses.
How term insurance protects your family?
Listed below are a few benefits that you and your family can enjoy with the help of a term plan:
- Tax benefits
The premiums that you pay for this policy are eligible for tax exemptions under Section 80C of the Indian Income Tax Act. The premium limit is up to Rs.1.5 Lakhs. Similarly, the death benefits that your loved ones get from this policy are also tax exempted under certain conditions of Section 10(10D). If you get your premiums in return as a maturity benefit; they are also eligible for tax exemption under Section 10(10D).
- Financial net
A term plan is designed to protect your loved ones from financial instability in the event of your untimely demise. This is vital if you happen to be the sole breadwinner for your family. The sum assured that the insurer pays to your family will help them in managing all the necessary expenses. If it is your parents who are dependent on you, it will help with their medical costs and other cost of living. If its your partner and children, it will help them with the daily expenses. The money can be used to secure the future of your child as well. Similarly, the amount can used to clear any outstanding loans or for medical procedures.
There is a misconception that the premiums for term plans are quite high. That is not true. Premiums for term plans are quite affordable. You have the option of paying the premiums on either monthly, quarterly, or a yearly basis. Low premiums and flexible payment options allow you to manage your regular expenses easily without putting any dent in your finances. You can select a premium amount that suits your needs and provides with you a good enough life cover.
- Option of plans
When it comes to selecting a term plan for you and your family, there are many options you can select from. The increasing term plan increases the amount of the sum assured annually without there being any increase in the premium. Similarly, the decreasing term plan decreases the sum assured annually based on your insurance requirements. You can also opt for convertible term plans that allow you to change the type of your plan after a certain time period.
Should you buy a term plan for your family?
With the benefits mentioned above, it becomes clear that a term plan is the best financial security that you can provide to your family in your absence. The money they get from the policy will ensure they neither do not face an uncertain future nor will they have to rely on any other sources for money.
So, if you ever wonder about how term insurance protects your family before you invest in one, the benefits mentioned above should be helpful enough. You can get in touch with your insurance advisor to know more about different term plans and the benefits they provide.