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Term Insurance Benefits and Things To Consider Before Buying a Term Insurance Plan

Dec 26, 2018

Safety is an important consideration for all of us. For instance, when we are driving, we make sure that we have our seatbelts on for our safety. Naturally, we extend this care and consideration to every sphere of life and are even more cautious when it comes to our family.

Life insurance is an effective way of ensuring that your family is safe and protected when you are not there to look after them. A life insurance policy with an adequate sum assured goes a long way towards keeping them financially protected and on track to achieve their life goals. Term Insurance plans offer you a higher sum assured at a relatively low premium. This makes term insurance affordable for everyone and helps you take care of your family's goals.

Advantages of Term Insurance Plans :
1. Peace of mind

Adequate life insurance cover relieves you of your worries about your loved ones if you're not there to look after them. You know that if something were to happen to you, your family members will get a lump sum amount that can pay for their financial obligations and they can continue to maintain their current standard of living in future as well.

2. Value for money

Term Insurance offers a higher sum assured for a relatively lower premium. This is possible because it offers you only protection during the term of insurance. There is no maturity benefit in this plan.

3. Tax Exemption

The premiums paid towards term insurance are eligible for deduction up to Rs 1,50,000 under Section 80C of the Income Tax Act, 1961 subject to provisions stated therein. This is applicable on the life of policyholder, his/ her spouse and children. Further, under Section 10(10D) of the Income Tax Act, 1961, any amount received on policy maturity / surrender or on death will also be tax-exempt subject to fulfillment of specific conditions.

Considerations before buying a term insurance cover :
4. How much insurance do I need and for how long?

The basic formula to calculate an ideal life insurance cover depends on your age and annual income. You can go up to 25 times of your annual income to ensure you have an adequate cover. You need to be insured for that amount for the length of your earning life span.

5. Is the premium affordable?

Term Insurance premiums are reasonably priced, making them one of the preferred life insurance plan to opt for, if you are looking for a pure insurance cover. Further, you can choose to pay the premium annually, half yearly, quarterly or monthly, depending on what suits you best. Thus, you should opt for a life insurance plan which best suits your needs, budget and financial goals.

6. Will this help me achieve my life goals?

The main aim of any investment is to help you fulfil your dreams. By taking a term insurance cover, you can rest assured that your family will be well looked after even in your absence and can continue to achieve their goals in life.

Knowing the advantages and things to remember before buying a term plan will help you make wise investment decisions. Go for a term plan today as it is the basic 'must have' life insurance cover for everyone. It acts like a safety shield for your family's goals even if you are not around to fulfil them.

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