Term insurance acts as a cushion for family members of the policyholder in the absence of a policyholder. A Term Insurance plan helps your family become financially independent. It is a type of policy that offers the sum assured to the family members in an event of the sudden demise of the policyholder during the policy tenure. This policy promises to offer you high insurance coverage at an affordable premium.
Following are benefits that you can enjoy if covered under a term insurance policy:
1. Sum Assured Payout: Term insurance is a type of life insurance policy that offers the sum assured to the family members in an event of the sudden demise of the policyholder during the tenure of the policy. This policy is said to offer you high insurance coverage with a minimum premium amount.
2. Availability of Whole Life Cover: Some of the insurance companies offer term insurance benefits for the whole life that is some of the insurance companies offer whole life cover under term insurance. This means the policyholder is entitled to life cover up to 99 years of age.
3. Critical Illness Cover: Term insurance plans offer a critical illness cover wherein the insurance plan covers the critical illness listed in the insurance company’s terms and conditions. Term insurance does not have an inbuilt critical illness cover an applicant can opt to purchase the critical illness that can be very helpful. This additional cover provides financial help for the medical expenses that have been incurred.
4. Budget-Friendly: Term insurance is known for providing life cover at affordable premiums. Term insurance plans are considered the simplest form of insurance hence the affordable premiums. Premiums of term insurance are less than other life insurance plans. Affordable premiums allow an applicant to choose the best favorable sum assured amount that helps the applicant to ensure that there is enough financial support for his/her family member after the applicant's demise.
5. Tax Benefits: Life insurance premiums qualify for tax deduction under Section 80C of the Income Tax Act. Also, as per Section 10D, the sum assured received on maturity of the life insurance plan is tax-free if the premium is up to 10% of the sum assured or the sum assured is at least 10 times the premium amount.
6. Customisation: Riders are additional benefits that an insurance company offers at the time of purchasing the life insurance plans. They are purchased with the plan increasing the premium and they enhance the life cover. Some of the common riders offered by the insurance companies are Critical Illness Rider, Accidental Death Benefit Rider, Accidental Total or Permanent Disability Rider and Waiver of Premium Rider. With these optional additional riders being offered a person can make better decisions by choosing the best plan and rider offered with it.