The importance of investment planning cannot be understated if you are an earning professional. Keeping term insurance as a part of your investment planning is necessary if you wish to provide financial safety and security for your family, even in your absence. Talking about the year 2023, when the cost of living has increased substantially, having a term insurance plan is of utmost importance, especially if you are the family’s sole earning member. Read on to know why having a Term insurance plan in 2023 is a good option.
Before we dive into the importance of Term insurance, let’s understand Term insurance.
What is Term insurance?
The term insurance is an investment plan that offers a death benefit to the policyholder’s family after his demise. Term insurance is easily accessible at preferred premium rates with a high assured sum. Investing in Term insurance becomes necessary, especially if you have a family that depends on you. Eventualities can happen anytime, and assuring a financially stable life for your family allows them to fulfil their financial dreams even in your absence.
When Should You Buy a Term insurance?
Ideally, it would be best if you bought a term insurance as early as possible, even from your first salary. Buying term insurance early helps you to get a greater sum assured at a very low premium. Also, there isn’t any age specific to buy a term plan, no matter what your age is, you can have a term insurance plan.
Why Should You Buy a Term Insurance Plan?
There are several benefits of having a term insurance plan apart from the financial safety that your family gets in your absence.
Most Preferred Investment Plan
The key reason term insurance plans are preferred among people is the simplicity. This pure life cover assures the sum assured to the immediate dependants in the absence of the policy holder. Moreover, it just requires you to pay the premium and get the plan.
High Sum Assured at Affordable Premiums
The key benefit of having a term plan is that you can get a huge sum assured at a much lower premium although the premium depends upon the age of the policy holder. So the earlier you buy the plan, lesser the premium you will have to pay. Moreover, you can also buy a term insurance plan online by visiting your insurer’s website. This eliminates the cost of middlemen.
Tax Benefits
Term insurance plans also provide tax benefits to the policyholder. You can claim tax benefits up to 1.5 lakhs under Section 80C of Income tax act. In fact, the entire payout is tax exempted under Section 10(10D).
What Distinguishes Term Insurance from Life Insurance?
Observations that are crucial. While whole life insurance has a cash value component that can be accessed at any moment throughout your lifetime, term life insurance is “pure” insurance. If you pay your premiums on time, whole life insurance will protect you for the rest of your life, unlike term insurance, which only provides coverage for a set period of time.
What are the Benefits of Term Life Insurance?
These are the main benefits of purchasing term life insurance like: high sum assured for cheap premium choices for simple to understand death benefit payment rider’s additional income tax advantages, protection from accidental death benefits, critical illness, and premium option refund.
What is the Ideal Age for Term Insurance Plan?
Between the ages of 18 and 65, term insurance can be purchased. However, your twenties and thirties are excellent years to begin looking for insurance and making future plans for your family.
What is the purpose of Term Insurance?
Term insurance is an essential, straightforward life insurance product for your family’s financial security. A term plan provides comprehensive coverage at an affordable price, ensuring that your family can carry on living their current lifestyle in the future.
Therefore, making a term plan investment and ensuring your family’s financial stability are essential. Term insurance has a purpose and meaning when purchased at different ages.
Final Word
A term insurance plan is an agreement between the policyholder and the insurer, so it is necessary to look for a trusted insurance provider when buying a term insurance plan. Investing your time in researching the term insurance plans and choosing a sum that would fulfil your family requirements in your absence is prudent. Another way is to look for the claim settlement ratio before finalising your term plan with your preferred insurer. After you have finalised a few plans, go for the one that offers maximum benefit at a competitive cost.
