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Term insurance
A form of life insurance policy known as “term insurance” offers protection for a certain “term” of years, or for a specific amount of time. A death benefit will be paid if the insured passes away within the time frame stated in the policy and the policy is active, or in effect.
Financial stability for you and your family may be achieved through term insurance in a reliable, cost-effective manner. It provides your loved ones with financial security in the event of a tragic incident and also gives you the choice to protect yourself against life-threatening illnesses like cancer and heart disease, etc.
Insurance coverage is still largely exempted from financial planning in the nation. Families in India seldom think about the requirement or value of having a sufficient insurance plan. Many people are unfamiliar with terms like life insurance and term insurance. These conclusions are supported by reliable facts and are not just speculative. At least 75% of Indians do not have any type of life insurance, according to a study done by India Spend using the data that is currently accessible. Another significant statistic is that, on average, those with insurance are only guaranteed 8% of what is needed to support a family.
Benefits of term insurance
- Low Cost: Term insurance is much less expensive than other types of life insurance since it does not include a savings or investment component.
- Financial Security: Term insurance has made financial security accessible since you are guaranteed a sizable cover at a low cost. With term insurance, you may live comfortably without worrying about how your family will be supported financially if you death occurs.
- Complete Protection: By paying an extra payment, term insurance policies with riders can be changed. A term insurance policy can include critical sickness insurance, accidental death insurance, and disability insurance.
- Fixed Premium: This insurance policy has a relatively constant premium because it has a fixed amount insured and is not market-indexed. The rates stay the same for the duration of the policy term after an insurance provider approves your request.
- Increased Life Cover: As a family's lifestyle improves, their demands also do. In light of the rising costs of living, it is important to expand insurance coverage. Depending on the insured's age, the sum assured automatically grows at a predetermined pace.
- Flexibility: You can choose to pay the premiums annually or monthly.
- Income Tax Benefits: There are several income tax advantages to purchasing a term insurance policy. The Income Tax Act of 1961's Section 80C allows you to deduct up to Rs 1.5 lakh from your taxable income each year for term insurance premiums. Under Section 10 (10D) of the income-tax legislation, the amount assured paid to the nominee is not subject to taxation.
FAQ
Queries
? What exactly are the riders for term insurance?
Additional coverage that is added on top of the standard policy is known as a rider in term insurance. To increase the coverage for certain events like accidental death and disability as well as coverage for critical illnesses, you may add riders to your policy. These add-ons provide reimbursement in addition to the standard insurance amount.
? Does term life insurance cover illness-related death?
Indeed, term insurance covers fatal illnesses. It will be regarded as a case of illness-related death and may arise from an inherited problem or from receiving medical care. The policy also provides coverage for death brought on by life-threatening conditions including cancer, heart attack, renal failure, and stroke.
? How much insurance coverage should I choose for my term policy?
Purchasing a life insurance policy with an insurance amount that is 10 to 15 times your yearly salary is advised. For instance, you should purchase a term insurance policy with an amount insured of 50 to 75 lakhs if your yearly salary is 5 lakhs. The rationale for this is that the dependant should continue to live in the same manner following the policyholder's passing.
? What are the Term Plan's maturity advantages?
This insurance does not offer maturity advantages. A term plan is essentially a death benefit plan where the recipient only receives the insured amount in the event of the death of the insured. If the insured lives to maturity, the insurance expires with no payout. But there are certain term insurance products that provide a return on premium.
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