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Top 5 Reasons Why Term Insurance Plan Is Important

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Financial planning is a necessary practice that needs to be done with the utmost care to ensure a wealthy and prosperous future. In a country like India, life insurance remains the most popular investment channel for citizens.

However, apart from the standard plan, not many people are aware of its various subsets like a term insurance plan. This indicates a lack of financial awareness among the people in India, which is also the reason why most people never consider investing at all.

A term insurance plan is a kind of life insurance policy that offers life coverage for only a specific interval of time. If you die unfortunately during the tenure of your policy, a death benefit will be offered to your chosen nominee to help them manage their expenses in your absence.

However, in case you survive throughout the policy tenure, you won’t get any maturity benefits. That’s because there’s no element of investments in these plans, which guarantees the safety of your principal capital.

There are plenty of reasons to consider investing your hard-earned money in term insurance plans as stated below:

  1. Lower Costs

As India is still a developing country, not many people can afford to keep a considerable amount of their household income aside for life insurance. Their current income might not permit them to invest in an expensive insurance plan.

However, term insurance is considered one of the most basic types of financial investment that doesn’t require much capital. There is no investment component involved, which makes them much more affordable than other insurance plans.

  1. Comprehensive Coverage

Although term insurance in itself is a type of life insurance, you can modify it to gain health-related benefits as well. In exchange for some additional premiums, you can add riders to your policy such as accidental death, critical illness, or disability to extend the coverage of your policy to a great extent.

  1. Increased Life Cover

As your family’s lifestyle improves, their needs and requirements also tend to grow with time. It is essential to make sure that your insurance cover is sufficient enough to fulfill your financial needs in the future. Some term insurance plans provide coverage as per different stages of your life. At a certain point, the value of the assured sum begins increasing as per your age.

  1. Fixed Premium

As stated above, term insurance is a basic product with only the purpose of securing your family’s life in the event of your unfortunate demise. With that said, the premiums required for these plans or the assured sum aren’t linked to the market in any way, which makes this investment plan a lot more stable than the rest. After you zero in the policy, the premiums will remain the same throughout the policy tenure.

  1. Income Tax Benefits

Purchasing a term insurance plan also allows you to save a significant amount of money on taxes. There are several tax-saving benefits associated with a term plan. As per the current amendments of the Income Tax Act of India, the sum assured as well as the premiums paid towards the policy are eligible for tax benefits of up to Rs.1.5 Lakhs.

Best Term Plans Available in India

  1. Canara HSBC OBC iSelect Star Term Plan

With several payout modes and coverage options available, the iSelect Star Term Plan offered by Canara HSBC OBC is one of the most highly customizable term plans available in India. If you’re looking for great flexibility in your investments, you must check out this plan.

With this term insurance plan, you can also cover your spouse in the same policy and accumulate a significant amount of financial corpus to protect your family in case of any unfortunate eventualities that might occur in the future.

  1. Bajaj Allianz eTouch Online Term Plan

The eTouch online term plan by Bajaj Allianz Life Insurance is one of the most affordable investment options available in India. It offers a good life cover for very nominal premiums and keeps your family financially protected in case of your unfortunate demise.

There are four different variants of the plan available for you to choose from. The returns gained through this plan as well as the premiums paid towards the policy are both eligible for a tax deduction and benefits of up to Rs. 1.5 Lakhs.

Moreover, as it is an online term plan, you don’t need to go through the hassle of paperwork and can get the policy easily. There are no middlemen involved in the process that allows you to save even more on overhead expenses.

  1. Aviva Life Shield Advantage Plan

The Life Shield Advantage Plan by Aviva Life Insurance is a non-linked and non-participating term insurance plan that offers comprehensive security to your family in the event of your unfortunate demise and helps them sustain a normal lifestyle.

The plan also features a “Return of Premium” option in addition to the death benefit. Either way, your principal amount is always kept secured and you’ll gain assured returns, regardless of whether you die or survive through the policy tenure.

Moreover, the plan also offers various premium payment terms to choose from as per your requirements and financial capabilities. So, make sure you check out this plan and zero in on a policy as early as possible.

Final Words

As there’s still a lot of financial unawareness in India, many people never get to enjoy the impeccable benefits offered by term insurance plans. If you’re reading this far, make sure you don’t forget to purchase a policy if you haven’t already and sustain a prosperous future for your loved ones.

To determine the assured sum or premiums of your preferred plan, you can also use an online term insurance calculator to make your work easier. These plans surely fit the bill to secure the life of your family and dependents.

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