We all love our families, and there is no doubt about it. They are in fact the people for whom we live and do lots of things. To see smiles on their faces, we do everything possible. Have you ever thought about a situation when you are not there with them anymore to do all the things to keep them happy? And if you are the sole breadwinner of the family, you need to take such a possibility very seriously. Life is uncertain, and we all know it. However, we can put a little effort into making our family’s future financially secure. How? You can buy a term insurance plan.
What is term insurance?
Term insurance is a life insurance plan that provides cover to the beneficiary if the insured passes away within the tenure. Once an individual buys a term plan, he/she has to pay a premium until the insured is alive. If the insured survives through the term insurance period, there will not be any return to the insured or the beneficiary. However, there are several types of term insurance for families offered by various life insurance companies in India, which you can compare before purchasing one.
Benefits of Term Insurance Plans
- Financial security: In the event of the death of the policyholder, the family gets a cover. This can help them to pay off loans, clear medical expenses, and even fund the education of the kids. When you buy a term plan for the family, you have to make one of your family members the nominee of the term plan, and the same nominee will receive the cover.
- Affordable premiums: The premiums for the term plans are reasonable. Moreover, if you want, you can even pay the premiums yearly. The cover amount for the yearly premium will almost be the same as that of the monthly or quarterly premiums.
- Flexible: Many term plans increase or decrease the coverage amount with time. You can even start paying slightly higher premiums over time if it is feasible for you.
- Tax Benefits: The premiums you pay on term plans are tax-deductible up to a limit of INR 1.5 lakh per annum under Section 80C of the Income Tax Act of 1961. In a few cases under Section 10D, death benefits are fully tax-exempt; however, these are based on several factors. It is very important to renew a policy before it expires as premiums on lapsed policies are not always eligible for tax deductions.
- Coverage of additional risks and illnesses: If you pay an additional small amount to the monthly premium, it may allow you to gain coverage for the additional risks which can be genetic conditions, critical illnesses, or accidental impairments. You may also be allowed to top up to increase the policy coverage at significant junctures in your life such as marriage, parenthood, etc.
There are several benefits of buying term plans for a family. With these plans in place, you can rest assured that your family does not have to worry about the finances when you are not around anymore.
The only thing you need to care about is the insurance company that you are purchasing the term insurance plan from. Also, do not forget to go through all the clauses before finalizing the term plan. You also need to make the beneficiary aware of all the clauses, so the dependent does not find it difficult to claim the cover.
If you want to compare the term plans from different insurance companies, you can visit the website of IIFL Insurance. You can also find several other types of insurance plans there that might interest you.