Have you considered the financial repercussions to your family in case of your sudden demise? Most people plan their finances for various goals like marriage, children education, and retirement. Unfortunately, several individuals do not consider the difficulties their family may face in case of premature demise.
Life insurance is one way to ensure the financial security of your family when you are not around. Traditional plans like endowment and money back are expensive and you may not be able to acquire a larger sum assured due to financial constraints.
An excellent way to overcome this limitation is to buy a term plan. These are available at economical premiums and are considered the cheapest types of life policies. These types of insurance plans provide death benefits to your family in case unfortunate event during the policy tenure. Because these are pure protection policies, there are no survival benefits offered by the insurers.
Benefits of availing a term plan
Lump sum payout
These types of life insurance plans pay the death benefits under the policy to your family on your demise as a lump sum amount. This money may be used for various purposes, such as continued education of your children or repaying the outstanding home loan or other debts.
Sustain current lifestyle
There is no reason why your family should not sustain their present lifestyles after your demise. An important benefit of life insurance is that your survivors do not have to depend on others for financial support. The amount received through these policies provides your family with the money needed to sustain their lifestyle without facing financial difficulties. They are able to continue living in your absence without compromising on their pride.
Critical illness or disability benefit
A lesser known term insurance benefit is that this plan offers financial support to your family in case you are disabled or diagnosed with a critical illness. These types of insurance plans offer supplementary income if you suffer from a severe sickness or are disabled due to an accident.
Features of term insurance plans
You may avail tax benefits under section 80C and Section 10 (10D) of the Income Tax (IT) Act, 1961 on the premium amount. If you opt for critical illness cover, the additional amount is also eligible for tax benefits under section 80D.
You may avail these plans if you are 18 years or more. The maximum age limit is 65 years. Premiums on term insurance policies are lower and it is recommended you avail one at a younger age. This allows you to enjoy higher insurance coverage at a lower amount.
Standard term plans do not provide survival benefits. However, some insurance companies now offer Term Return of Premium (TROP) plans. Under these policies, your premium is refunded if you survive during the policy tenure. TROP policies are becoming popular; however, it is important you read the terms and conditions before purchasing this insurance plan.
In addition to the regular plan, you may opt for additional riders by paying a higher premium. Some of the additional riders include accidental disability or death, critical illness, or accelerated sum assured. You must compare the features of plans offered by different insurance companies to make an informed decision. Avail term insurance today and secure the financial future of your family even in your absence.