Why Should You Think About Buying Term Insurance?

The entire world is reeling under the clutches of the COVID-19 pandemic, with millions of people losing their lives to this deadly viral infection. It has brought the focus to stay healthy more than anything else in life. You may be thinking of hitting the gym for improving your fitness levels and following a proper diet plan to increase immunity levels but are you looking to buy a term insurance policy? It must be on the top of your to-do list, especially during the current times, say investment advisors.

A term insurance policy is the most classic form of providing financial protection to your family members and dependents in the event of any unfortunate incidents in your life, such as death. The insurer shall pay the coverage amount to your dependents after your demise, which will help them to tackle the financial challenges of life while at the same time not worrying about achieving their goals even if you are not around them. 

Priya Kapoor is a 25-year-old singer working with top musicians across the country. She stays in Chennai for work reasons, and her parents stay in Mumbai. Her dream is to buy a flat and bring her parents to stay with her, for which she plans to go for a home loan within 2 years. However, Priya doesn’t want her parents to bear the burden of her home loan in case something happens to her in the meantime. She is currently single but looks to marry in another five years, which will add more responsibilities. The best way for her to manage her dreams without burdening her parents is to take a term life insurance that will allow her to pursue her goals with the confidence of her family members taken care, in the event of unfortunate incidents.

Why Buy Term Insurance? 

There are different types of insurance products – term plans, money back plans, ULIP, endowment plans, whole life plans, etc., But have you wondered why so much emphasis is given to term insurance plans alone? There is not one but many reasons that will explain the importance that this category of insurance gets from financial experts. They are described below: 

Top 7 Reasons Why You Should Buy a Term Insurance Policy

• Has lowest premiums: Among the many reasons to buy term life insurance, the most important is the low cost of owning a policy. By purchasing a term plan at an early age, the probability of any health complication is also low, making it less risky for the insurer to offer higher coverage at a low premium. In addition, the more you delay, premiums are to get costlier, leaving you with lesser money to spend on other things.

• Can buy it from anywhere: It is common nowadays to purchase products online, and life insurance is also one of them. However, buying term insurance online has become a child’s play. All insurance firms have made it easy to purchase insurance policies online without the need to visit their office or rely on insurance agents for suggestions. The other advantage is that there are online term insurance plans that charge even less premium than traditional plans. With complaints of mis-selling being told upon insurance agents, buying a policy yourself will help you know more about the policy without being tricked.

• Gives complete life protection: As long as you are fit and fine, you will be able to support the entire family, but life is always unpredictable and unfortunate situations tend to derail our plans. For example, let’s say you meet with an accident or diagnosed with critical illness, or encounter death all of a sudden. A term plan comes to the rescue during those situations, acting as a shield to protect your family in the same way that you would have done. 

• Protects your assets: It is not easy to build assets in this world full of competition. The last thing anyone will want to see is their hard-earned wealth is not appropriately maintained after their lifetime due to lack of finances. A term plan helps you safeguard your assets while taking care of the liabilities without burdening your family members. By properly assessing assets and liabilities at hand and deciding on appropriate coverage, the amount will create an excellent buffer for your dependents to fall on in case of mishaps.

• Gives Rider/ Add-on options: Riders are add-ons to your existing life insurance policy, providing more protection to yourself from trending issues such as diseases, illness, accidents, etc. This makes it possible for you to retain the same policy while making it future-proof instead of multiple policies for multiple reasons. The popular riders offered by most life insurers are critical illness rider, accident/ disability benefit rider, income benefit rider, etc.

• Provides benefit payout options: In your absence, the lump sum amount received from the insurer will support your family members to lead a comfortable life. The term insurance benefits could be paid as a lump sum amount or in regular intervals as regular income. The policyholder can make this choice when applying for the policy itself, taking into account the needs and goals of your family members. 

• Tax benefits: A term insurance policy not only supports your family after your demise but provides income tax benefits while filing your IT returns. Section 80C and 80D of the Income Tax Act 1961 offers tax exemption up to Rs 1.5 lakhs per year on the premiums paid towards life insurance and health insurance, respectively. Similarly, the term insurance benefit under section 10(10D) of Income Tax Act 1961 provides full tax exemption for the death benefits received by your dependents.

So, are you still thinking of buying term insurance? Well, it is never too late! The above pointers should have given you a brief on why you must seriously consider purchasing a term insurance policy if you don’t have one, as getting your risks covered is the first step towards offering financial freedom to your family. 

You can visit iiflinsurance.com, get quotes for different term insurance plans from top insurers in the country and opt for the right one for yourself and your family.