Staying Informed: Understanding Term Life Insurance & Its Benefits

blankIn an investment landscape as diverse as India where the requirements of every individual is shaped by their income patterns and dependants; term life insurance is often considered as one of the paramount ways of ensuring a steady insurance coverage and an assured death benefit. Beneficial for individuals who prefer prolonged insurance coverage and financial security, term life insurance is a way to secure aforementioned needs in a seamless manner.

Term life insurance is made to cover the needs of the insured and their dependents through an assured benefit sum in the event of the policyholder’s demise. The best term insurance plan in India is one that successfully combines an affordable means of securing one’s future where premiums are low and where one can customise their coverage and payout methods as per their convenience.

Within the broad range in the types of insurance that are available in India for potential policyholders to choose from the best term insurance can only be accessed by those to can avail the full breadth of benefits that are available to them.

Term life insurance is an asset as well, which can help one to secure or pay off loans in the long run, even in the absence of the primary income earner. The best term insurance plan is a resource to be used at times when unavoidable financial expenses have to be met by the surviving beneficiaries in the absence of the policyholder.

One of the best ways to avail the best term insurance plan in India, at an affordable investment rate is by choosing to get insured at a young age. A detriment of buying term life insurance plans at an older age is the high cost of premiums, as a person is most likely to have illnesses or ailments at this age rather than at a young age.

Buying a prolonged term insurance plan in one’s mid-twenties is the ideal decision, as the cost of premiums is significantly less and one can alter their terms of coverage once they have major life developments such as a marriage or a child.

Now that the importance and basics of term life insurance have been covered, let us understand the benefits of starting term life insurance early and what makes it the ideal insurance solution for many:

  1. Low Premiums: There is a range of insurance plans that offer coverage and future benefits to policyholders of all kinds. However, the more complex a plan is, the higher the premiums for them are. Hence, for those who are starting out with limited financial agency and insurance knowledge can choose to go for a term insurance plan as their first investment.

It is a simple instrument which has premiums that can go as low as Rs 600 a month, and are accessible to people from all income brackets.

  1. Lower Risk and Vulnerability: Investments and insurance plans targeted towards wealth accumulation are interdependent on one another as they help build each other. The money sent into these instruments is focussed on growing in value over time, and also allowing the insured person to fulfil their goals.

To be able to build a corpus and have a strong investment portfolio, one needs to be secure about things such as their life insurance expenses. The reason for that, is that in the due course of earning their capital in high-return schemes, one may experience financial losses in the market; hence when a person is insured under a term insurance plan their losses will not affect their coverage or tenure.

While investing in market-linked schemes and money instruments, one will not have to compromise on their life insurance requirements as they are increasingly affordable and customisable as per the customer’s needs.

  1. Tax Benefits: Since lawmakers understand the universality of needing to secure one’s future in the face of unforeseen emergencies; the premiums paid for a term insurance plan and the payout sum thus received from the same at the time of maturity is exempted from taxation under Section 80C and 10(10D) of the Income Tax Act, 1961.

Term life insurance plans are therefore an ideal choice of insurance and investment where the taxpayer can avail a tax deduction of up to Rs. 1, 50,000 from their net taxable income on account of the investment premiums they may have paid.

Insurance plans have slowly into favour as essentials for people because of changing lifestyles and better financial literacy amongst people. To make small payments in order to prepare for the future is a simple activity, but it can greatly influence the lives of those dependent on it when the time arrives.

To stay informed about various developments within the insurance providers and their quotes is vital in its own ways. As the dynamic space of term life insurance increases its penetration to the untapped parts of India, one should be conscious of their financial situation and the shape it may take in the future.

Max Life Insurance has a wide variety of term life insurance policies that cater to investors and the foreseeable expenses them and their dependents they may have; reach out to our financial advisors for more information about the plans that will suit your needs in trying times.