4 Benefits of Term Life Insurance

4 Benefits of Term Life Insurance

Term Life Insurance, as the name indicates, is a kind of life insurance that stretches out for a definite time period or term. Term life insurance plans are among the most affordable plans available in the market today. In a term life insurance, the nominee receives the sum assured after the death of the insured. It provides a safety net for the family of the deceased and their future financial needs after the passing away of the policyholder.

Term Life Insurance plan is a tool that helps provide financial security to the family of an individual in their absence. It is one of the most basic forms of financial security that a person can provide for their family. Another crucial factor of the term life insurance policy is the offered death benefit. It is paid out to the beneficiaries of the policy in the form of the sum assured, to pay off the liabilities or utilize it in the future for other financial requirements. To fully understand term life insurance, it is essential to know about its benefits.

Let’s take a look at some of the important benefits of buying term life insurance.

1. Simplicity

One of the best things about term life insurance is that it is extremely easy to understand with no complex underwritings. Opposed to the maturity benefit offered by other types of insurances, a term life plan provides death benefits. It means that the nominees receive the sum assured when the policyholder passes away. Additionally, the risks are covered only as long as the policyholder keeps paying the premium of the insurance. As soon as there is a break in the continuity of the payment, term insurance expires.

2. Affordability

Another key highlight of term life insurance is that it provides a high sum assured at the lowest premiums. As a matter of fact, the premium offered in term life insurance plans is lower than most other variants of life insurance policies. This gives customers a chance to opt for a higher sum assured at a moderately lower premium. Moreover, the premiums paid by the insured are locked in for the rest of the term of the policy. Therefore, it is always wiser to buy a term plan when you are young.

3. Security

The core purpose of term life insurance is to shelter-shield one’s family in the event of a mishap that leads to the policyholder’s death. Hence, term life insurance is an effective way to rest easy, regardless of what the future may hold. It ensures that your loved ones have enough provisions to lead a life on their own after your passage and that they are not burdened financially now that you are gone. It is a full-proof way to be ready for whatever the future holds.

4. Tax Advantages

Besides the safety provided by term life insurance, Section 80 C of the Income Tax Act also offers tax benefits. It allows policyholders to claim a deduction of up to Rs. 1.5 lacs. Under Section 10(10D) of the Income Tax Act, when the paid premium of the policy does not exceed 10% of the sum insured and 20% of the sum assured, the matured amount or bonus is tax exempted.

Hence, if you haven’t considered a term life insurance as yet, it’s a great and simple way to ensure the financial well-being of your loved ones after your demise, with several fruitful benefits.

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