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The arguments for and against Term insurance, as against whole life insurance, have evolved over the years, just as the insurance industry itself has seen a turnaround – factors such as competition, stricter regulations, and an evolution of the legal framework with the consumer in the centre, have led to a clear cut understanding of the benefits of term life insurance. So, what is it that makes people go for it as against its other counterpart in the insurance industry? Here is a look at some of the key attractions of the policy.
This should perhaps be one of the key drivers of growth for this insurance. In a world of complex concepts and ideas, where derivatives and tools tend to be beyond the comprehension of the common investor, Term Insurance comes across as a remarkably simple way to look upon securing one’s future. This is a no-frills approach that is as simple as low premiums for specific periods.
Affordability: In a world where essential things tend to be ever more expensive than what they were sometime earlier, being affordable is a chief draw for term life insurance. The premiums tend to be as low as they could ever get when it comes to securing your future, where you could ensure that your family‘s welfare is Assured at an affordable outlay.
Don’t prices keep crawling up the wall every passing day? It is not taxes and death, but also Inflation that is a certainty in life. However, term life insurance benefits include the freedom to look forward to fixed premiums over a period of time that you have enrolled for, where rising costs still do not threaten the value of the stakes that you have managed to secure with your term life insurance policy.
Think insurance, and you cannot but think of tax benefits associated with it. Your taxable income could be deducted to the tune of Rs 1 lakh, permitted under Section 80C of the Income Tax Act, in terms of the Premium paid. However, it is not just the premium paid that comes under the purview of term insurance tax benefits – any amount that is realised in the form of death benefits from the insurance Policy paid to the nominee would also be tax free, as you would expect.
One of the other benefits of term life insurance is its being open to customisation – you could add Riders to the insurance policy, as in the case of Critical Illness rider, accidental disability or dismemberment rider, to suit your needs and requirements.