Term insurance policies are probably the simplest and most popular type of life insurance policies available in India. It provides financial coverage for the insured as per the terms covered under the scheme, disbursing the sum insured to the next of kin in case of unfortunate demise. It is also known as renewable term assurance as you pay a premium to renew the policy every year.
The unmatched financial security and the ease of access make term insurance plans popular. It is one of the simplest ways to provide stable financial backing to someone’s loved one in case of a terminal illness, death, or disability. Moreover, there are several benefits of availing these types of insurance policies; let’s take a look.
Benefits of a term insurance policy
- Affordability – Term life insurance policies are some of the most affordable and comprehensive insurance plans available in the Indian financial market. The low premium amount makes it a great option amongst a large number of individuals. Leading companies like Bajaj Finserv charge only the minimum amount for their Term Insurance policy while providing a host of customer-friendly features and benefits for maximum coverage.
- Extensive protection – Most insurers financially cover the insured against death, accidental permanent disability, critical illness, and demise due to involvement with an accident. Such comprehensive coverage ensures that the insured and their family benefits from a steady financial backing during most emergency scenarios.
Moreover, individuals who take good care of their health may get to enjoy additional benefits. For example, non-smokers can get lower premium amounts, which is a significant benefit over people who smoke. Lower premium allows them to save more during the insurance tenor.
- Customisable options – An insured can opt for either the total sum insured pay-out as a lump sum amount or as a monthly income in case of an unfortunate demise. Some financial institution even allows modifying the payment option of term life insurance plans into quarterly, half-yearly, or annually according to their financial convenience.
- Premium waiver – Term insurance policies waiver the future premiums in case the insured loses his/her earning potential because of permanent disability due to an accident or contracting of a critical illness. However, the policy continues with the same benefits and coverage.
- Maximum age range – Best term insurance plans provide maximum coverage thanks to their wider age range. Any individual between the ages of 18 to 65 years can opt for such an insurance policy. The diverse age range covers all potential earning members of a household.
- Flexibility – Insurers often allow their customers to choose their policy and premium payment terms according to their own financial prowess. These insurance schemes come with tenors upwards of 40 years, which allows an individual to modify it according to their financial liabilities. They can also add other insurance policies, like the Retirement Pension Plan offered by Bajaj Finserv, and increase the tenor to lower the premium amount.
- Tax benefits – Term insurance schemes such as a life insurance policy is eligible for tax exemptions under Section 80C and 80CCC under the Income Tax Act of India. Under this regulation, one can claim exemptions of up to 20% on paid premium if its amount is more than 20% of the agreed sum assured. It can reach a maximum of Rs. 1.5 Lakh under Section 80C and 80CCC.
Term life policies are some of the most versatile, beneficial, and widely accepted financial product present in today’s financial market. Moreover, the number of options available means a borrower can choose the best term policy online and avail it accordingly.