Top 5 Benefits of Term Insurance


Top 5 Benefits of Term Insurance

Admin Mar 17, 2022

Every hour, 53 accidents occur on Indian roadways, resulting in the loss of 17 lives. Similarly, every day in the country, 83 individuals drown. With such a high mortality rate, the country should be covered by a wide range of insurance policies. The truth is a little different. A large portion of the population lacks adequate insurance coverage. Low life insurance penetration could be due to complex products and costly premiums. Term insurance policies, on the other hand, can make life insurance affordable to a large number of people.

Term insurance protects your family financially if you are unable to provide for them. In today’s environment, term insurance policies are one of the most significant types of life insurance to obtain.

Term insurance not only protects your family financially in the event of a disaster, but it also saves you money on taxes. You can also take advantage of a number of other advantages that come with term plans.

Take a look at the following list of term insurance advantages.

  • Whole Life Cover

One of the most important term insurance benefits is whole life insurance, which provides total protection for policyholders up to the age of 99 and beyond. If the breadwinner dies, a term insurance policy could help reduce the financial strain on family members.

  • Easy to understand

When acquiring a life insurance policy, it is preferable to have a thorough understanding of the specific terms included in the term insurance policy. Another advantage of term insurance is that it is one of the most simple policies to comprehend. In addition, a term insurance policy is solely a life insurance policy with no investment component. The premium must be paid on time, and the insurance provides coverage for a set period of time with a variety of term insurance advantages.

  • High Sum Assured at an Affordable Premium

The most straightforward sort of life insurance is a term policy. The low cost of term insurance is its most enticing aspect. A term insurance policy, when compared to any other sort of insurance policy, has unquestionably low premiums. The most important rule to remember when buying a plan is to stick to it. The earlier you buy, the lower the premium. Similarly, getting a term insurance policy online is preferable to buying one offline because the rates are lower. Furthermore, checking term insurance benefits online is simpler and more convenient.

  • Critical Illness

Any significant illness can occur at any point in one’s life. Furthermore, the costs of care for severe ailments could quickly deplete the savings. Though life insurance is the most essential term insurance benefit, you can also acquire critical illness insurance, which is frequently included in additional rider options and allows you to avoid paying for medical expenses and depleting your assets. It is critical that you take advantage of this term insurance benefit since you never know what will happen tomorrow, even if you are currently well.

  • Return Of Premium Option

A maturity benefit is not provided by a term insurance policy. However, you can only get a maturity benefit if you choose the return of premium option, which requires you to pay hefty premiums that will be repaid to you once you have completed the policy period. However, the entire amount of premiums that will be reimbursed excludes taxes, rider premiums, any levies, and the modal sum that is paid on the premium. You may also use an online term insurance calculator to get an estimate of the cost with and without maturity benefits, which will help you make an informed decision and assess your needs.

Additional Benefits

Last but not least, the term insurance policy provides tax benefits under two different provisions of the Internal Revenue Code. You can get a tax break on the premium you pay for a term insurance policy if you use Section 80 C. The premium paid up to the maximum limit of Rs 1.5 lakh is exempt from tax. Furthermore, a maturity benefit granted by some term insurance plans, particularly the TROP (Term Return of Premium Plan), is tax-free under Section 10 (10D).

  • Section 80c – You can get a tax break on the premium you pay for the coverage. The premiums paid for term insurance are eligible for tax exemption under Section 80C of the Income Tax Act 1961, up to a maximum limit of Rs.1.5 lakhs.
  • Section 10 (10D) – Under section 10(10D) of the Income Tax Act 1961, the maturity benefit granted by some term insurance policies (particularly the Term Return of Premium Plan TROP) is also eligible for tax exemption.

Accidental Death Benefit

This rider benefit is particularly important because it deals with an unavoidable, irreversible misfortune – the death of the person. As a result, his or her family is left to deal with the sadness while also being under a lot of financial stress. Unexpected medical bills are a huge expense right now, and if it turns out to be fatal, the family will have to manage the death toll as well as future pay. The blow of this two-fold risk of medical bills and permanent loss of pay from the death of the earning member can be softened by the addition of an accidental death benefit rider to the policy.

Why is it crucial to get Term Life Insurance in 2022?

In a nutshell, Term Life Insurance has a number of advantages. It provides more coverage for less money, is simple to understand, and has major tax benefits. However, before you evaluate all of the benefits, keep in mind that the primary objective of insurance is to provide protection rather than financial gain. Term insurance, unlike most other types of life insurance, sticks to this objective.