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Top 6 Reasons to Buy a Term Insurance Plan!

  8/30/23 11:09 AM

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Rahul Sharma is a newlywed marketing professional in his late 20’s. He is earning a salary package upwards of Rs. 10 lakhs. With added responsibilities on him now, he has taken a wise decision of buying insurance to ensure his family can live a comfortable life in the event of his untimely death. Everyone around him suggested going for a term plan, but no one could give him the exact reasons -Why term insurance works out so well for almost everyone?

Here, is something which makes things easier for him as well as for you.

Following are 6 reasons that explain why term insurance policies are the best bet:

  1. Financial Security
    A term insurance plan is preferably bought with the purpose of meeting certain goals. For example, if a person dies unpredictably, the money from insurance can be used to pay off debts or it can come in handy for children’s education or marriage, etc. Hence, it is prudent to buy a term policy early in your career so that it provides you with financial security at least until you retire.
     

  2. Economical
    These are no-frills to these plans that make them really easy on your pocket. You can buy a simple plan for a fixed term at minimal premiums and if anything happens to you during the term of the plan, the nominee gets a lump sum amount.
     

  3. Tax Benefits
    Premium paid towards the Term Insurance Policy avails tax benefits under section 80C and the proceeds of the insurance policy are tax-free as per section 10 (10) D of the Income Tax Act, 1961 as per the conditions laid in the Act.
     

  4. Timely Payout
    Most of the term insurance policies are pretty simple and therefore the insurance companies don’t have to debate a lot about paying up the claims. If there is death during the term of the policy the nominee can get their claims easily without any hassles provided the nominee is done with the requisite claim formalities.
     

  5. Flexibility
    You can select how the policy proceeds can be disbursed in case of your death. Some term plans offer monthly payouts where the sum assured amount can be given as a family income benefit to provide the regular cash flow to your dependents.
     

  6. Riders and Benefits
    Even though choosing the best term insurance policy is a simple process and most term plans provide basic life cover, some also come with the option of getting add-ons. For example, Rahul can opt to add critical illness cover, accidental death benefit, accidental total and permanent disability cover etc. to his basic term policy to make the plan even more robust and risk-free. Insurance plans like Edelweiss Tokio Life Zindagi Plus provide the Better half benefit that ensures enhanced financial security even in the absence of the main breadwinner.

Under this benefit, after the death of the policyholder, a life cover will start in his/her spouse’s name. This will be 50% of the life cover of the policyholder, up to an amount of Rs. 1cr. The spouse won’t have to pay any premium and the nominee will also get the sum assured.

These reasons are enough to convince Rahul totally about buying a Term Plan. What are you waiting for?

 

Neha Panchal - Financial Content Writer

Neha used to be an Engineer by Profession and Writer by passion, which is until she started pursuing full-time writing. She's presently working as a Financial Content Writer, with a keen interest in all things related to the Insurance Sector.

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