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Why Buy Term Insurance for Your Family? Research Team | Posted On Friday, July 19,2019, 05:53 PM

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Why Buy Term Insurance for Your Family?



What is Term Insurance?

Term insurance protects your family against risk. On an untimely demise of the policyholder within the term of the plan, the insurer pays the death benefit to the nominees. The term life plan has no survival benefits.

After availing the term life plan, the insured must pay premiums regularly, to enjoy coverage under the plan. The sum assured and insurance tenure depend on liabilities, number of dependents, current income and lifestyle expenses. 

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Why Buy Term Insurance for Your Family?

Advantages of Term Insurance Plan:

  • The main advantage of the term life insurance plan is the death benefit. Your family gets the money on an early demise and enjoys current lifestyle.
  • The term life plan takes care of liabilities on demise of the breadwinner.
  • One of the key benefits of term insurance plans are the policyholder can enjoy a high insurance cover at affordable premiums.
  • The term insurance also takes care of the insured in case of partial or total disability resulting from an accident if partial and permanent disability rider is availed. It provides emergency income to the insured in such a scenario.
  • The premiums paid towards the term life insurance plan are eligible for income tax benefits. Under Section 80C, a taxpayer avails income tax deduction up to Rs 1.5 Lakh a year on the premiums paid towards the term insurance policy. The death benefit is fully tax-free.

See Also: Term Insurance Plans with Return of Premium

Why Your Family Needs Term Insurance?

In today’s fast-paced life, term insurance is a must-have policy to cope up with uncertainty. Term insurance serves as a safety net in uncertain times, when your family is going through the emotional trauma of losing a family member.

The term insurance plan helps dependents meet financial liabilities and live a stable life on death of the breadwinner. Term insurance ensures your family doesn’t have to go through financial loss along with the emotional grief.

See Also: How to Secure Your Family With Term Insurance?

Who Should Buy a Term Insurance Plan?

The term insurance plan is risk protection that can be availed to offer financial security to family members and dependents of the policyholder, on loss of the breadwinner.

In case of demise of the policyholder due to a medical condition or an accident within the term, the nominee gets a lump sum payment called the death benefit. The insurance cover can be increased by availing the add-on benefits like accidental death benefit, critical illness cover and so on. Listed below are some categories of people who must purchase a term insurance plan:

  • Sole Earning Member of the Family: If you are the primary breadwinner who is taking care of family expenses, then a term insurance policy is a must. It allows your family pay off debts and takes care of major financial liabilities.
  • Newly Married: A term life plan takes care of the financial requirements of spouse in your absence. It helps remain financially independent despite the irreplaceable loss.
  • Young Professional: People who have dependent parents can also avail term life insurance. Availing a term life plan at a young age, helps enjoy higher insurance cover with minimum premiums.
  • Taxpayers: The term life insurance plan is a tax saving tool, which can be used to save income tax. Purchasing a term life plan helps meet long term financial goals as well as saves taxes.

See Also: Best Age to Buy a Term Insurance Plan

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