Due to the wide variety of insurance options available in the market, most customers ignore the simplest form of insurance. Being the purest form of insurance, term insurance provides coverage to the policyholder and financial protection to his family. Apart from this, it also makes sure that your family is completely safe, even in your absence. The idea behind term insurance is to protect the policyholder and his family.
Before buying term plan, it is important to understand the basics of term insurance. Knowing the benefits of term insurance and how it works ensures that you make a wise purchase decision. So, let us learn how term insurance works. Take a look:
1What is a Term Insurance Plan?
Among other life insurance policies, term insurance plans are the most cost-effective way to provide long-term protection to your family. When you opt for a term policy, your nominee can get a death benefit with the help of which they can lead a stable lifestyle even in the absence of the policyholder. Not only this, due to no provision of maturity benefit, but the premium amount in term plan is also less.
If the policyholder survives the policy’s term, the term of the plan will come to an end and no benefit will be paid to the policyholder or his dependents.
When you know the basics of this policy, you will decide the right type of term insurance for yourself. Therefore, investing in an online term plan is one of how you allow your family to achieve goals even in your absence.
Let us have a look at the below-mentioned benefits of investing in term insurance:
2What are the benefits of investing in term insurance?
- It offers maturity benefits
One thing that has been established so far is that the policyholder’s nominee gets death benefits in term plans. But have you thought about what happens if the policyholder survives the policy term? In that case, in some term plans, when an investor continues the policy till the completion of the policy term, they get the survival benefit.
- Provides tax benefits
Since the term plan comes under the list of policies covered under Section 80C of the Income Tax Act, 1961, its customers get tax benefits. The premium paid for the policy is exempted from the payment of taxes. Also, the death benefit received in term insurance is exempt from tax under section 10(10D). The provisions of the Income Tax Act, 1961 apply to the above tax benefits.
- This increases the value of the cover
Some companies allow their policyholders to improve their coverage during contingencies. For example, policyholders can opt for 50% correction at the time of their marriage and 25% improvement if they have a child. With the facility to improve the cover, the investor can start with moderate coverage, which can be further enhanced when the big responsibilities in life come along. Before taking any such decision, the policyholder will have to go through the terms and conditions of the policy.
- Riders are available to provide additional features
To increase the usefulness of the policy, insurance companies also provide additional features like riders to the policyholders. With the help of these riders, policyholders can avail maximum benefits as per their requirements. Be sure to check outriders like disability cover, waiver of premium, etc. Online Term Plan is a preferred option for those who need a suitable plan without compromising on coverage benefits.