You work hard to provide financial security for your family. However, life is uncertain and have you considered what may happen to them in case of an unfortunate event? What will your family do if you are diagnosed with a critical disease, meet with an accident, or even pass away?
To ensure the financial security of your loved ones in an unfortunate situation, it is important to procure adequate life coverage. A term insurance policy is an excellent and affordable way to avail of such coverage.
A term plan is a pure life cover that provides the policy benefits in case of an unfortunate event. This type of life insurance is available for a certain period of time. If you pass away during the policy period, the benefits are paid to your beneficiaries. Compared to traditional life insurance policies, term plans are an affordable way to procure higher coverage.
Here are four advantages of term insurance policies.
1. Longer duration
Most insurers provide term insurance until the age of 75 years. With advanced medical technology, life expectancy has increased. A long-term life cover will protect the financial future of your family even when you are old.
2. Affordable premium
If you use an online term insurance calculator, you will be able to find maximum coverage at an affordable premium. However, you need to know what factors, such as smoking, medical history, policy duration, and sum assured are considered to calculate the insurance premium. This allows you to procure higher coverage without spending too much on the premium.
3. Income tax benefits
The Income Tax (IT) Act, 1961 provides tax benefits on the premium amount. You may claim a tax deduction of up to INR 1.5 lakh per annum under section 80C of the IT Act, 1961. The claim benefits received by your beneficiaries are also tax-free under section 10(10) of the IT Act, 1961.
4. Cover debt obligations
You may avail of a term insurance policy even for a shorter period of time. If you have availed of a home loan, you may use a term plan to secure the same for a tenure that matches the mortgage duration. This allows your family to repay the loan amount easily in case of an untoward incident.
Using a term insurance calculator
An online calculator is simple to use. You may use one to compare different options and make an informed decision. Here are the steps you may follow to use an online calculator.
- You must enter your personal information, such as gender, family size, name, income, date of birth, and marital status.
- In the next step, you will need to enter medical history details for self and your family. You may also need to provide details like Aadhar number, Permanent Account Number (PAN), and banking information.
- The third step is to input information like required sum assured and policy tenure. You will also need to choose the premium payment method and the payment interval (monthly, quarterly, semi-annual, or annual).
- Once you are comfortable with the estimated premium as determined by the term insurance calculator, you may purchase the policy by paying through a card or net banking.
You may also acquire the term insurance policy online, which is not only convenient but also less expensive. This is because the overheads incurred by the insurance companies are lower and the savings are provided to you through lower premium.
The aforementioned procedure is the common method but may vary from one insurer to another. It is recommended you check multiple options offered by various insurance companies to make the right decision.