The goal of having a term insurance plan is to secure the financial future of your family members/dependents after you. But, the term insurance meaning and its benefits is something that you probably already know about. Let’s look at each and every feature one by one that you might not be aware of.
You can increase/decrease your cover as and when you want
If you opt for an upgrade in lifestyle, more expenses would be needed to be taken care of with a larger insurance cover to help your family sustain it after you. Conversely, if you’re looking to live a simpler life or have debts to pay, your other financial commitments may possibly reduce or some may even cease to exist. In the light of the same, you can either increase or decrease your cover at any given point in time during the course of your premium-paying period. It may affect and alter the amount that you must pay to the insurer on an annual or monthly basis.
The availability of multiple payout options while claiming the Death Benefit
In case an unfortunate incident renders you unemployable or causes you to pass away, your family members or dependents will be able to claim a fixed sum assured. The same is provided by the insurer who has your policy so that at least the financial side of things are taken care of in your absence. A nominee, dependent or family member can choose to take a payout in various forms. They can either opt for the payout of a fixed amount from the insurer’s side on a monthly basis.
You only need to pay until you are working
The third in the list of term insurance benefits is that it only requires the policy holder to pay the premiums for as long as they are employed. It means that if you choose to retire at the age of 50 but have taken a 50-year plan at the age of 35, you will be covered until the age of 80. It means that the insured will not have to worry about it all for at least 30 more years.
Premium payments towards a term insurance plan can provide you a tax benefit of up to Rs 1,50,000 per year, as per the provisions made under 80C of the Income Tax Act of 1961. In case an accident takes you away from your family, your family will receive the sum that is categorised under Death Benefit, which is also exempt from tax. However, to check for the validity of the same, it is highly recommended that you take a look at the existing tax laws.
Add-ons or riders, as they are called, expand the scope of a term insurance plan. Each such add on has its own unique benefit and can only be availed if the insured has paid for it. Some of the examples for such riders are the likes of the ones that get you travel insurance, permit you to claim your premiums on the maturity and protect you against specific illnesses, amongst others.
Last in the list of term insurance benefits is the fact that Indian term insurance plans are one of the most affordable insurance covers available. This means that the premiums you pay for a term insurance plan are going to be lesser than the ones charged under other insurance plans. It will, however, majorly depend on your age at the time of you taking up one.