The insurance market is growing in the country with aggressive marketing done by the private insurers to expand their reach and provide insurance coverage to as many people as possible. At the same time, the government is also running awareness programmes to educate the citizens about the importance of having an insurance cover, not only to save taxes, but to safeguard family against financial hardships.
However, there are a lot of insurance products being sold by various companies and sometimes it does become very confusing as to which plan to invest in. To make things simpler and easier for you to understand, we would advise you to simple invest in term insurance plans, which are one of the best insurance plans available to you.
What Is A Term Plan?
A term plan is a simple insurance plan that covers you for the term of the plan and pays your nominee the sum assured if you happen to die during the term is active. If you outlive the policy term then the plan terminates and there are no maturity benefits.
Why Is It So Beneficial?
Almost every insurance company has launched term plans and especially for the online customers thereby making insurance agents irrelevant as far as term policy goes. The reason being they understand the needs of the customers and want to bring the best options for those who want to keep their insurance planning simple and economical.
To explain further, following are the major benefits of buying term plans:
1) Financial Benefits for Family
If you’re the sole bread-winner of the family, it is important to ensure that your family’s financial independence is retained even if you’re not around. A term plan offers massive sum assured at extremely lower premiums that can come handy in times of emergencies. There are online term plans that offer coverage of Rs. 1 crore at an annual premium of as little as Rs.7000-10,000/-. If something happens to you while the plan is active, your family will get the sum assured as death benefit that can help them to carry on with their lives till someone else replaces you as the income-earner in the family.
2) Safeguard Your Debts
If you have certain loans to pay off like car loan, home loan etc. and unfortunately you pass away before they are paid off, the entire responsibility of paying the debt will come on your family. They may not be ready to handle the emotional trauma as well as the financial one. Therefore keep those loan amounts in mind and select a term plan with adequate sum assured so that in your absence, money from the death benefit can be used to pay off such debts and still be left with some money for day to day expenses of the family for a specific period.
3) Future Obligations
As we grow in life, so does our obligations. Firstly there is a job, then marriage happens and then children, their education and their marriage. To make sure all these financial liabilities are well-taken care of and your absence doesn’t stop your family from getting what it deserves, a term insurance plan is the best insurance you can buy at extremely economical premiums that easily fit into your pockets.
4) Easy On Pocket
If you’re starting a business or are new into a job and don’t have enough funds at your disposal to spend on complicated insurance policies that do offer hefty returns, but also ask for equally hefty premium payments, then term plans are the answer for you. The premiums are dirt cheap compared to other plans while the coverage is substantial. As per some experts, you can buy a term insurance plan with a sum assured of almost 15-17 times of your annual income if you buy them at a very young age.
5) Tax Benefits
This is yet another benefit of term plans. You can save tax on premiums paid under section 80C and section 10(10D) of the Income Tax Act. So you save money on premiums, get a big coverage, secure your and family’s future and then also save tax on the low premium you pay!
Do not think too hard on whether to buy term plan or not. Instead focus your energies on researching about various term plans available in the market, compare their terms and conditions along with premium due and select the plan that fits your budget with maximum benefits. And you can do all this from the comfort of your home with just a few clicks of the button of your computer. There are websites that offer you detailed information about all insurance products to make the whole process extremely easy, simple and smooth for you.
Invest your time wisely and make smart decisions.