There are multiple reasons to purchase a term life insurance policy. However, opting for the right term insurance plan play a significant role in the lives of every millennial. With term insurance, a millennial can protect his family from financial contingencies, which may arise after his death.
A majority of millennials are unaware of the importance of buying term insurance plans. Understanding the importance of a term plan will help them to make informed decisions at the time of purchase. Therefore, go through this guide on term insurance plans given below:
Why invest in term insurance at an early stage of life?
The sole motive of a term plan is the financial security of the life goals of your family. Therefore, the term insurance plan covers the contingencies of your families in your absence. At the time of the death of the policyholder, the nominees receive a death benefit which helps him survive the financial loss. The provision of death benefit helps in supporting the expenses of the beneficiaries in compelling circumstances.
The risks associated with your health at an early stage of your life are typically less. When you purchase a term policy, the insurance company determines the risks depending on your age and health condition. In simpler terms, the younger you are, the lesser is the premium amount.
Apart from affordability, the term plans provide a plethora of other benefits to its policyholders. Here’s a closer look at these top four benefits of a term plan. Take a look below:
What are term insurance benefits?
1. Low premium on investing early
Your health conditions determine the premium of term insurance plans. At a young age, a policyholder is less prone to severe diseases. As he grows older, the chances of suffering from severe health conditions are more. To pay less, purchase term insurance plans at an early stage of your life.
2. Tax benefits
Save money in form of tax deductions. Under a term plan, the policyholder can do so by saving taxes on premiums. The premiums paid towards the policy are deducted up to Rs. 1,50,000, as stated by Section 80C of the Income Tax Act, 1961. Moreover, the death benefits are subjected to tax exemptions, the above deductions/ exemptions are subject to the provisions stated in the Income Tax Act 1961.
3. Income replacement
Term plans are the purest form of life insurance. It works solely on the concept of family’s financial security. Hence, during an unfortunate event like your death, your loved ones receive a death benefit. The death benefit provided by the insurance company allows the nominees to accomplish their life goals in your absence.
4. Peace of mind
The top priority of every policyholder is the well-being of his family. While an individual is alive, he strives hard to accomplish the financial needs of his family. However, after his death, there is no one to look after them. Therefore, purchase a term plan since it offers death benefits to the nominees of the policyholder.
To sum up, a term plan is the easiest way to ensure equal protection of yourself and your entire family from uncertainties. It’s always better to start planning for the future before it’s too late. Analyze your financial needs accurately and invest accordingly.