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Under term insurance plans, the tax benefits can be applicable to the premium amount, as stated under Section 80C. As a policyholder, you can qualify to claim a deduction up to Rs. 1,50,000 on your taxable income. Apart from Section 80C, you can also be liable to claim a deduction under Section 10(10D) of the Income Tax Act, 1961, wherein the death pay-out can be tax-free.
While tax benefits can be crucial, you should not overlook the term insurance benefits that can help you in the long run. The primary motto behind the formulation of term insurance plans can be to offer financial security to your loved ones. Due to the main objective of protection, it can provide you with many benefits for your safety. Therefore, let’ go through the top three benefits of term insurance plans mentioned below:
- Adequate coverage
Since a term policy aims to protect your family from unfortunate events, such as loss of income, death, physical disability, and so on, it can offer financial coverage based on your needs. If anything happens to you in the future, the term coverage can act as a saviour to your family. As the nominees, your insurer can receive the cover in your absence for their financial well-being. Moreover, it can allow them to maintain their current standard of living as well after your demise.
- Low premium
Amongst many insurance products, such as endowment policy, money-back plan, and so forth, a term policy can be the most affordable product. Although an offline term policy is affordable, you can opt for an online term plan that can be relatively cheaper. Due to the zero involvement of an insurance agent and other external charges, your insurance company can provide you with a term policy at a low rate. Besides, if you buy term insurance at a young age, the premium can be low due to your physically fit health condition.
- Multiple types
There are different term insurance plans available in the market to suit your financial goals and requirements. At the time of purchase, you can select between the following:
- Traditional term policy
It can only provide death benefits to safeguard the members of your family.
- Smart term plan
It can combine death benefits as well as survival benefits along with different variant options under a single integrated plan.
- Decreasing term policy
As the name suggests, you can decrease the term coverage after a specific period.
- Single & regular premium payment policy
While a single premium payment policy can let you make a lump-sum payment, the regular premium payment plan can allow you to pay the amount within a stipulated time.
- Additional term insurance benefits
A term policy can provide you with additional benefits in the form of riders or add-on covers. With riders or add-on covers, you can enhance your base term policy. Many insurance companies can provide a host of riders, such as critical illness, loss of income, waiver of premium, and so forth. Although these riders can be an essential part, see to it that you don’t avail excess riders since it can increase the overall cost of the term policy.
As highlighted above, term insurance plans go beyond the provision of tax benefits. It can be a pure protection plan that is a sub-subject of traditional life insurance. Although a term policy can offer a host of benefits, compare various term options and choose the final one based on your financial needs. Moreover, consider all the benefits provided under term policies to ensure your financial well-being in the long run.
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