We always want to provide best lifestyle to our family. We invest in financial instruments to safeguard the future of our loved ones. However, the feeling of uncertainty always lurks, deep down. In order to protect your family against any mishap or eventuality, having a term insurance plan is very important
The term insurance plan offers income replacement to the family in case of uncertain demise of the insured person, so that all their financial needs can be fulfilled for a long run. The term insurance plans are not only economical but it is also a great saving instrument to fulfill your future financial goal. However, it is not mandatory in India to buy a term insurance plan but with the manifold of benefits offered by term insurance plans the perspective of purchasing a term insurance plan may vary. In case you are wondering about the best term insurance policy to buy, then there are a plethora of options available in the market to choose from.
Further in this article we will briefly discuss the reasons why term insurance policy is a smart investment choice to achieve long term benefit.
This is the foremost and the basic benefit offered by term insurance plan. A term insurance plan provides financial protection to the family of the insured in case of the uncertain demise of the insured person. By buying a simple term plan, you can safeguard the financial future of your loved ones. In case of uncertain demise of the policy holder, the insurer pays the sum assured amount as death benefit to the beneficiary of the policy. Similarly term insurance plan also offers retirement term insurance plan that offers a regular flow of income in form of annuity payouts during the post retirement age.
Apart from life protection, there is an array of term insurance plans like whole life plans, endowment plans, ULIP plans, pension plans, guaranteed income plans, growth plans etc. that provides an opportunity of growth of the invested premium amount. These plans not only offer maturity benefit but also provide comprehensive life coverage so that the insured can ensure a financial protection for their family future. Plans like whole life plans offers guaranteed income protection to the policy holder up to the age of 100. Likewise, growth plans guarantee returns to comprehend your future goals such as purchasing a car or home.
In the absence or demise of the insured, the term insurance plan acts as the impeccable shield to take care of the long-term loans and dues of the family of the policy holder when he/she is not around anymore. By choosing for the appropriate amount of the sum assured, your family will not have to bear the problem of loan repayments when you are not around. The sum assured amount paid to the beneficiary of the policy will be sufficient to pay off all the pending debts. Similarly, term insurance plans can also be held as collateral to avail long-term loans such as home loans.
For every salaried individual paying an income tax seems to be a herculean task. Under the Section 80C of the Income Tax Act, the premium paid towards term insurance plan up to a maximum limit of Rs.1.5 lakh is applicable for tax exemption under Income Tax Act, 1961. The claim made towards term insurance plan is also applicable for tax deduction under Section 10(10D) of Income Tax Act, 1961.
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