After rigorous study, as you become capable of earning, your parents will urge you to save your money for your future use. With time, you will find your friends and colleagues talking about their future planning and financial savings. They will also give you good advice and prompt you to have a life insurance policy.
Your well-wishers will always want what is best for you. Even though sometimes you will feel that having a term policy or term insurance is hectic, you will have a lot of benefits in the future.
What is a term plan policy?
Before you decide to purchase any term policy, you need to know what a term plan policy is. It is an insurance policy that protects for a certain period or “term.” During the ongoing term of the policy, if the insured person dies, then the death benefit will be paid.
If you want to do a term policy, then you should check out the higher sum insured at economical rates of premiums. The term policy will start from the date of purchase of the policy, and it can be done annually or half-yearly, or quarterly. The choice of paying the premium will be upon you, and the sum insured.
Why should you purchase a term plan policy?
Purchasing a term plan policy at a younger age will give you high benefits, sizable coverage at a very affordable installment. If you love your loved ones, having a term plan policy will make them well secured.
It will provide great financial support to your family; the term plan policy will guarantee death benefit, the lump sum amount of money, additional payment. Some term policy also helps to secure your child’s future, saving money for their higher education, or saving money for your retirement, etc.
Therefore, purchasing a term policy can be highly advantageous.
Perks of having a term insurance
People will tell you to invest your money in different sectors. Every sector will have its risks, but investing money in term insurance has a lot of perks. Here are some of the benefits that you will enjoy having term insurance:
● Economical premiums
One of the biggest perks of having term insurance is its economic premiums rates. The policyholder can decide to take a huge sum of money besides having low premiums. Term insurance helps to cover the life of the policyholder.
If you are healthy and non-smoker, your insurance company will charge fewer premiums. If the policyholder is a woman, she will also enjoy lower premiums. Hence you will enjoy a higher sum insured besides having lower premiums.
● Policy period
The policy period or tenure goes on till the date the policy started to the age specified in the policy of the policyholder. The premium amount also remains lower.
So, if a person of age 27 has purchased a term policy till the age of 70, then the policy will go on for 43 years. The premiums can also be paid annually or quarterly, or half-yearly, as per your convenience.
● Tax privileges
Having term insurance like life insurance can get you tax deduction under Section 80C of Income Tax, 1961. If the premium covers yourself, your wife, and your children, then the tax deduction amount is limited up to Rs 1,50,000.
But if the insurance is taken for someone else, then there will be no tax deductions. Another benefit of having an insurance policy is that, under Section 10D of Income Tax, the benefits received from the insurance policy will be free from the government. It also includes additional coverage.
● Additional coverage
Additional coverage is also known as Riders, which comes along with the term insurance plan. This additional coverage covers disability, acute illness, death from accident, etc. Having Riders is beneficial as the terms and conditionals are fulfilled.
Conclusion
Before you purchase any term plan policy, you must be clear about why you want to purchase a policy. You should know how the policy will help you and your family in the future. The most important thing is you should always read the terms and conditions of the policy.
The term plan policy will no doubt give the best benefits, and it is the best way to save money for future use. Hence having a term plan policy will be the first step to your future and financial planning.
