What is a Pure Term Insurance Plan?
Pure term insurance plan is an affordable life insurance plan that offers sum assured to your nominee in case of your unfortunate demise during the policy term. These plans are primarily focused on providing life cover, so if you survive the policy term, there’s no maturity benefit unless return of premium option is opted for.
The plan focuses on ensuring that your family is financially secure even after your death. The death benefit can help your dependents cover major expenses like education, daily needs etc. Since it is a pure protection plan , the premiums are usually low.
Features and benefits of pure term insurance plans
Pure term insurance plans offer many beneficial features. Get to know more about these reasons to buy term insurance here –
High coverage at affordable premiums
Pure term plans are more affordable than other kinds of life insurance plans. In return for low premiums, they offer a high life cover, thereby ensuring that you can secure your family’s financial future. By combining high coverage with low premiums, pure term plans are the most affordable products to offer financial protection to your loved ones.
Easy purchase options
Purchasing a pure term plan is easy. You can do so through online channels or offline modes. To buy term insurance online, you just need to visit the website of the insurance company and submit your application along with necessary documents as per the required procedure. To buy term insurance offline, you can approach an intermediary like an insurance agent.
Term insurance tax benefits
Term plans also offer tax benefits to the policyholder. Under Section 80C of the Income Tax Act, 1961, the premium paid for pure term life insurance is eligible for deduction. Additionally, the death benefit is also eligible for term insurance tax benefits as per Section 10 (10D) of the Income Tax Act, 1961. The above deductions and exemptions are subject to the provisions mentioned in the Income Tax Act, 1961, as amended from time to time.
Top Reasons to Invest in a Pure Term Insurance Plan
You must know that a pure term insurance plan is an effective way when you are looking for a plan that protects your family’s future. Learn the key reasons to choose such a plan:
Provides financial security for dependents
Pure term insurance ensures that your loved ones remain financially secure if you pass away during the policy term. By using the payout, your family can pay for important expenses like education costs, daily expenses, repaying loans etc.
Availability of a wide range of riders
You can also get the option to select from a of a wide range of riders, such as accidental death benefit rider , critical illness rider, wavier of premium, etc depending on the plan. Riders are add on benefits which help enhance the coverage of the plan and are available at an additional nominal premium.
Factors to consider that will help you choose the right term insurance plan
Before buying a pure term plan, you need to consider the following factors, so you can choose the right plan for yourself and your family –
- Your family’s needs and life goals, so you can purchase a cover that is adequate to meet those requirements.
- Your debts and liabilities, so the cover you buy can be sufficient to help your family meet those obligations in your absence.
- The claim settlement ratio of the insurer, so you can be rest assured that your nominees’ claim would be settled on time.
- The inflation factor, because you will need to ensure that the cover is large enough to help your family financially several years down the line.
Conclusion
A pure term life insurance offers substantial life coverage at affordable premiums, making it a practical choice for many.. In case of your untimely demise during the policy term, your nominee get the sum assured that can help them manage important expenses like daily needs, education, etc. With flexible payment options and the ability to add riders (depending on the plan) , pure term life insurance offers both financial protection and peace of mind.
FAQs
Who should buy a pure term insurance plan?
The plan is suitable for someone who has financial dependents, like a spouse, children, or parents. It can be useful for your loved ones because it ensures their financial security in case of your untimely demise during policy term.
Do pure term plans offer return of premium if the life assured survives the policy term?
Pure term plans don’t offer return of premium unless a return of premium plan is opted for during purchase of policy.
Can I add riders like critical illness or accidental death benefit riders to a pure term plan?
You can enhance your pure term plan’s coverage by adding riders such as a critical illness benefit or accidental death benefit. However, the availability of these riders depends on the specific plan you choose.
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