After you get married, your spouse can become a joint member of the family. Whether your spouse is earning or not, their financial well-being can be your top priority. To fulfil your spouse’s financial requirements, you might save extra during your active working years. But do you think saving is enough? While you may leave no stones unturned when you are alive to protect your partner, how will you safeguard them in your absence? For the financial security of your spouse after your demise, you can buy term insurance. Therefore, let’s understand what is term insurance in detail:
Term insurance can be an essential part of your financial plan. Since your financial plan might vary based on your life stages, your needs might also change. To match your evolving needs, many insurance companies can provide you with the following types of term insurance plans given below:
- Regular term plan
It can offer death benefits for the financial well-being of your loved ones
- Smart term plan
It can provide death benefits as well as survival benefits along with variants to safeguard you and your family.
- Term plan with return of premium
It can return your whole premium amount on the maturity date.
- Increasing term plan
It can allow you to increase the term coverage after you enter a new phase of your life.
- Decreasing term plan
It can let you decrease the term coverage when you do not need it.
The features of term insurance plans can vary based on its types as well as insurance companies. However, let’s go through the most common features of a term policy mentioned below:
Cover can determine your or family’s financial stability in the future. Therefore, consider the financial requirement first and choose an adequate sum assured value.
The premium can be an essential element of a term policy. Since a term policy provides a financial payout, you should pay the premium quarterly, monthly, half-yearly, and annually.
Many insurance providers might have introduced variants recently under term insurance policies to match your dynamics needs.
The primary reason for the inclusion of riders under term plans can be to enhance your term coverage with accidental death rider, critical illness rider, a physical disability rider, and so on.
The main objective of a term plan can be to offer financial protection. Apart from financial security, a term plan can provide you with the following benefits given below:
- Your family can clear your past liabilities
At a young age, you might have taken loans to fulfil the financial goals of your loved ones. For instance, you might have borrowed home loans to buy a house or taken a student loan for your child’s education. If anything happens to you during the on-going tenure of loan repayment, your family can clear your past liability with the term coverage received after your demise.
- You can receive tax benefits
Many of you might buy term insurance to reduce your tax liability. Under term insurance, you can save taxes with the help of Section 80C and Section 10(10D) of the Income Tax Act, 1961. Section 80C can provide a deduction up to Rs. 1.5 Lakh, which you can receive a tax-free maturity payout due to Section 10(10D).
- You can pay low premium
Term plans can be the most affordable of all insurance products. Although it is cheaper, you should determine the premium rate with the help of a term insurance calculator before you purchase a policy.
To sum up, your partner can be the centre of your universe. Due to their importance in your life, you might constantly worry about their financial security. To protect them financially at every step of your life, you should buy a policy that can provide maximum term insurance benefits at an affordable rate.