Term insurance is a form of life insurance policy that provides coverage for a specific “term” of the year in exchange for a predetermined payment. Term life insurance, as a pure protection plan, provides more insurance coverage for a cheaper cost.
Term insurance plans provide financial protection for the entire family in the event of the policyholder’s untimely death. Optional coverage for critical illnesses and accidental death is also available. You’ll be insured for a long time, and the rates are reasonable.
Reasons to buy Term Life Insurance
- Family Dependency: When you’re not around, you can utilize the term insurance money to cover your dependents’ and family’s monthly expenditures. It also helps you achieve important life goals like your child’s education and marriage.
- Asset Protection: A term plan allows you to borrow money for things like a car or a house. Nonetheless, if you pass away, your dependents and family may be responsible for loan repayment. Your family might use the term insurance payout to pay off the outstanding obligations in this situation.
- Lifestyle related risks: Today’s lifestyle issues frequently result in a variety of disorders and diseases. Some term insurance plans cover your dependents and loved ones not only when you die, but also provide critical sickness coverage for the rest of your life. This important feature compensates for the detection of certain life-threatening disorders, such as heart attack or cancer.
Reason to buy Term Life Insurance EARLY
- Your premium is set at the time you purchase the insurance and remains constant throughout your life.
- After your birthday, your premiums may increase by 4% to 8% each year.
- If you get a lifestyle disease, your coverage application may be denied or your rates may increase by 50-100 percent.
- Each plan and insurer may have different eligibility requirements for term insurance.
- Each insurance company has a documented set of terms and conditions. However, the general rule is that you must be at least 18 years old to purchase a term insurance policy.
- Similarly, the highest age limit for purchasing a term insurance policy is 65. So, if you want to buy a term plan, make sure you’re in this age category.
Best suited for:
Ideally, term insurance plan is a necessity for everyone – any individual who would like to provide life protection to their family members. Below are the groups of people who can benefit the most:
- Parents: Parents are often the family’s sole income and the only source of financial assistance for their children. Having a term insurance policy is thus the greatest approach to ensure the financial future of the children. In the same way that a term plan pays a death benefit to the policy beneficiary in the event of the insured person’s untimely death, a life insurance policy pays a death benefit to the policy beneficiary in the event of the insured person’s untimely death.
- Married Couples: Even if you are not present, a term insurance policy might provide financial security for your spouse. In the event of an unforeseen incident, the term insurance plan not only protects the recipient financially, but also covers the obligations.
- Young Professionals: Term insurance is highly suggested if you are a young professional who has recently started working. The reason for this is simple: you will get a larger level of coverage for a lesser cost.
- Taxpayers: Aside from providing life insurance, one of the key advantages of getting a term insurance policy is that it allows you to save money on taxes. The premiums for the term coverage are tax deductible under section 80C of the Internal Revenue Code. Thus, if you want to save money on taxes while also getting the benefit of life insurance, you should acquire a term policy.
Features of Term Life Insurance:
- Purchase is simple.
- Long-term security
- Payment convenience
- Additional rider options