We take precautions for almost everything that we do, right from riding or driving to cooking. Then why do we ignore one of the most important aspects of our life. We are well aware of the uncertainty that life brings to the table. One of the easiest ways of handling it is taking precautions in the form of insurance. With a lot of options to choose from, it can get a bit overwhelming for most of us. So, we have picked up one of the most commonly opted insurance plan, a term insurance plan. Here are some reasons why it should be in your portfolio.
- Early Bird
If you are someone who likes to use early bird offers, then a term plan is just for you. The earlier you join the term insurance bandwagon, the lesser premium you pay. For the same cover, a person in his/her 20s will pay an amount substantially lower than someone who is in their 30s.
- Affordable Premiums
This is in fact one of the USPs of a term insurance plan. A term plan allows you to secure a high sum assured for a nominal amount as its premium. Unlike most other insurance plans, it does not focus on providing additional benefits such as investments and savings. It only focuses on providing death cover to the insured, this allows the plan to cut down on the costs to a drastic level. The premium amount is lower than most other insurance products.
- Flexible Tenure
The amount of flexibility and customizations available with a term plan, makes it a compelling product to ignore. You can pick up a term plan for a tenure as low as 5 years and can continue with the plan till you attain the age of 85 years. These values largely depend on your insurer. This flexibility lets you pick up a term plan for specific milestones in your life. For an instance, if your home loan is valid for 10 years more, you can opt for a term plan for that duration.
- Income Tax
Since it is an insurance product at the end of the day, you stand to benefit from income tax deductions. You can claim the insurance premium paid for your term plan under Section 80C. Should the worst happen to you and the policy comes in to effect, your nominees wouldn’t have to pay taxes on the received sum assured.
- Static Premiums
For most of the term insurances, the premium amount remains the same all throughout the term of the policy. You might continue to get a lot of surprises, but an increased premium cost isn’t one of them.
If you thought that the term plan can only do so much, riders will prove you wrong. There are a host of riders that you can choose for your term plan. Riders let you enhance the coverage of your policy without burning a hole in your pocket. You can add any of the following to your term plan.
- Accidental death
- Partial or permanent disability
- Critical illness
- Waiver of premium
Ease of purchase
You can browse any of the insurer’s website and opt for a term insurance from their website. You must compare the features, benefits and price of term plans by different vendors before finalizing the deal.
The above are some reasons why you should consider the purchase of a term plan. Its low cost along with the high sum assured makes it a favorite among the young and the old.