Term insurance is one of the simplest and most affordable ways to secure your family’s future. It offers financial support to your loved ones in case of your untimely death, along with other great term insurance benefits like tax savings. Let’s take a detailed look at why term insurance is a must-have for everyone and how it can help you build a strong financial safety net.
Term insurance is a type of life insurance policy that provides coverage for a specific period, known as the “policy term.” If the insured person passes away during this term, their family (or nominee) receives a lump sum payout known as the “death benefit.”
Unlike other life insurance policies, the benefits of term life insurance do not include any investment or savings component. Its sole purpose is protection—making it straightforward, affordable, and highly effective.
For example:
You buy a 1 crore term insurance policy for a 30-year term and pay a small monthly premium.
If something happens to you during this time, your family will receive 1 crore, helping them stay financially stable.
Term insurance offers several advantages that make it one of the best ways to protect your family. Let’s break them down in simple terms:
Term insurance is known for its low cost. With just a small amount every month or year, you can secure a large sum assured for your family. For instance:
A 1 crore term insurance policy can cost as little as ₹478 per month.
This affordability makes it accessible to people from all walks of life.
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While regular term plans don’t give back any money if you outlive the policy term, some plans offer a Return of Premium (ROP) feature. This means you get back all the premiums you paid if you survive the policy period. It’s like a safety net where you don’t lose your money, and this is one of the best term insurance benefits.
Many term plans now offer coverage until the age of 99 or even 100. This ensures your family is financially protected for their entire lifetime. Such long-term coverage provides peace of mind and is particularly beneficial for estate planning.
This term plan benefits give you flexibility in how you pay your premiums. You can choose:
Payment Terms: Pay all at once (single premium), for a limited number of years, or throughout the policy term.
Modes: Monthly, quarterly, half-yearly, or annually.
This flexibility helps you manage your payments without straining your budget.
Every family has different financial needs. Term insurance allows you to choose how your family will receive the death benefit:
As a lump sum.
In monthly instalments to cover regular expenses.
A combination of both.
With increasing monthly payouts to match rising costs over time.
This ensures your loved ones get the money in a way that works best for them.
You can enhance your term insurance policy with affordable add-ons called “riders.” Some popular riders include:
Accidental Death Benefit: Extra payout if the death is due to an accident.
Critical Illness Cover: Financial support if diagnosed with a serious illness like cancer.
Waiver of Premium: Stops your premium payments if you’re unable to work due to disability or illness.
These riders make your plan more comprehensive and offer additional protection.
Term insurance helps you save money on taxes.
Premiums paid qualify for tax deductions under Section 80C (up to ₹1.5 lakh per year).
Health-related riders qualify under Section 80D.
The payout to your family is tax-free under Section 10(10D).
These tax benefits make term insurance a smart choice for financial planning.
Thanks to technology, buying term insurance has become incredibly simple. You can compare plans, check claim settlement ratios, and purchase a policy online in just a few minutes. There’s no need for lengthy paperwork or waiting times.
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There are many term life insurance benefits, the earlier you buy term insurance, the better. Here’s why:
Premiums are lower when you’re young and healthy. As you age or develop health issues, the premiums increase. For example:
A non-smoker in their 20s can secure a 1 crore policy for just ₹728 annually, while the same policy costs ₹5795 for someone in their 60s.
When you buy early, you can opt for a higher sum assured at a low cost. This ensures that your family will have adequate financial protection in the future.
Once you purchase a policy, the premium amount stays fixed for the entire policy term. This means you won’t have to pay more as you grow older or if your health condition changes.
Buying at a young age allows you to enjoy coverage for a longer period. You can opt for policies that last until your 70s, 80s, or even 100 years of age.
Term insurance benefits ensure your family’s financial stability, even in your absence. Here’s how:
The death benefit acts as an income replacement, helping your family maintain their lifestyle, pay bills, and meet daily expenses.
If you have outstanding loans (like a home loan or car loan), the insurance payout can help clear these debts, ensuring your family isn’t burdened.
Without term insurance, your family might have to sell valuable assets like property or jewellery to meet financial needs. The payout helps protect these assets.
The sum assured offers immediate financial relief, allowing your family to focus on their emotional well-being without worrying about money.
Here’s an approximate idea of premiums for non-smokers and smokers for a 1 crore term plan:
|
Age |
Non-Smokers (In Rupees) |
Smokers (In Rupees) |
|
20s |
728 |
1158 |
|
30s |
760 |
1369 |
|
40s |
1109 |
1997 |
|
50s |
1787 |
3364 |
|
60s |
5795 |
9059 |
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Term insurance benefits make it an essential part of financial planning. It’s affordable, offers significant tax savings, and, most importantly, ensures your family’s financial stability in your absence. Whether you’re just starting your career or planning for retirement, there’s a term insurance plan for everyone.
Don’t wait until it’s too late. Start securing your family’s future today by exploring and comparing term insurance policies. Remember, the peace of mind that comes with knowing your loved ones are financially protected is priceless!
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