If you think term insurance is a ‘waste of money’, think again…
Do any of these sentences sound familiar?
- Insurance is too complex for me
- I am too young to buy an insurance policy
- What’s going to happen to me? I am hale and hearty!
- I am always here for my family…
- Health science is pretty advanced, people live much
longer If yes, then you need to consider the case of Aditya and Radha.
My colleague told me that she was investing in a term policy. I could not understand the need for it. She said, “Just like you, I too did not care for life insurance earlier. However I saw death very closely in my family. Aditya, my brother-in-law passed away in a car accident. He was 48. This left my sister Radha in an emotional shock and financial disorder.
Luckily, Aditya had taken a term insurance plan at the age of 37. He had chosen a life cover of ₹2 crore and a policy term of 30 years. Radha received the amount within three months. This helped her manage daily expenses as well save for the bigger goals like her child’s education and marriage.”
After this conversation, my perception about life insurance changed. I now acknowledge that anybody can face a crisis in life. It is always beneficial to plan income protection for your loved ones such as parents, spouse, siblings, and children.
Term insurance policy allows you to achieve just that. The proceeds from the term plan will allow your family/ dependents to maintain their lifestyle, meet their financial goals, and pay off liabilities in case of the policy holder’s unfortunate early demise. Interestingly, Term Insurance
is now available with “return of premium” option also. The first step to having term insurance, is knowing the benefits.
So, what are the Key Benefits of Term Insurance?
1. Term Insurance offers high life covers at lower premiums
One of the major benefits of term insurance is its low cost. Additionally, the premiums are lower when you buy it a young age. Thus, the earlier you buy a term policy, the lower the premiums.
2. Simplicity of Term Plans
Understanding term insurance is easy. It is a pure life cover. This means that there is no investment component. One needs to simply pay premiums against which the insurer covers the life risk of the policyholder for a fixed duration.
3. Tax Benefits of Term Insurance
Tax savings should not be the main reason to purchase a term policy; nevertheless, both the premiums as well as the payouts offer tax benefits and exemptions respectively as per prevailing tax laws.
Benefits under Section 80C
Life insurance premiums up to Rs. 1.5 lakh per annum are exempt as per section 80C of the Indian Income Tax Act subject to fulfilment of certain conditions specified. This is also available for the life insurance premiums paid for your spouse and/or children.
Benefits under Section 10 (10D)
Term insurance plans offer certain payout on maturity and/or death of the policyholder. The maturity amount, or the death benefit, are fully exempt under the provisions of 10 (10D) of the Income Tax Act 1961.
4. Death Benefit Options
While term policies provide a lump sum maturity amount, you can get plans that combine lump sum and monthly incomes, and also those with an option of lump sum with monthly income.
This helps your family manage regular expenses and also manage the inflation impact.
5. Riders of Term Policy
Term insurance policies come with optional riders that enhance the benefits of a basic term insurance plan on addition of a nominal premium. For example, opting for a Accidental Death and Dismemberment allows the life assured to stop paying premiums if he or she suffers from dismemberment. The policy will not lapse and the cover continues.
6. Whether to take insurance online OR through Renascent Wealth?
Following advantages reach you, when you plan and obtain insurance through Renascent Wealth:
- Need analysis based on specific individual parameters, rather than standard templates.
- Scientific approach to customise insurance coverage which is most suitable to you.
- Ensuring adequate insurance coverage to create good income protection.
- Qualitative and factual underwriting to ensure hassle free claims.
- Selection of reliable Insurance Co. based on credibility, financial strength, claim settlement ratio and economy of premium.