Everyone has to agree in the saying that life is uncertain and that health is the real wealth, but the past year has actually shown the entire world just how accurate these sayings are! COVID-19 has taken the whole world by shock, and it got people thinking about how crucial it is to have a life cover that can secure their family even in their absence.
A term insurance policy can help you support your family financially and ensure that they do not face any financial burdens when the responsibilities come on to them in your absence.
Term plan is also one of the most basic and straightforward policies that one can opt for, especially during the current testing times. If you are considering a term insurance policy, then here are a few things you must keep in mind:
- Buy At An Early Age
If you opt for the term insurance at an early age, then insurance companies will be more than ready to offer you a higher coverage for a lower premium plan and offer you the choice between payment frequencies.
- Plan Your Finances
A term plan can be an ideal tax-saving tool as well. While most of the benefits of a terminsurance are for the beneficiaries of the policy, the tax benefit is something that the policyholder can benefit from as long as the policy is active.
- Customising Policy
Discuss with your family and understand their financial needs at present and potential expenses in the future. Remember to calculate the rate of inflation in the future as well. This will help you come up with a number that would be an ideal sum assured you need to opt for in your term insurance policy.
There are many benefits that a termplan offers but ensuring a worry-free and debt-free future for your family, even when you are not around, is priceless. With the help of this policy, you can plan your finances in the present and save for their future at the same time.
Why Is Term Plan A Must-Have In 2021?
The past year has turned out to be quite hard on all the families who lost their loved ones as they not only have to bear this emotional loss but are also left to look after all the debts and expenses in the future. Here’s how a term insuranceplan can help you make the correct provisions for your family’s independence today:
- Life cover
When you opt for a term insurance plan, you get a life cover that can take care of your family’s finances and future security. If you are the sole earning member or primary breadwinner of your family, the life cover offered by term insurance could also act as an income replacement.
Ensure you run term plan comparison to know which insurer is offering the highest sum assured for the longest policy tenure.
- Assured income
A term insurance policy offers a one-time lump sum payout to the beneficiaries of the policy or allows them to opt for monthly payouts as well. If there are many monthly expenses that recur, like electricity bill, loan EMI, etc., then receiving a monthly sum would make it easier for your family to look after their finances.
If you are the sole breadwinner of your family, then the monthly payouts from our policy will ensure your family doesn’t have to be financially burdened in your absence.
- Planning for retirement
If you have opted for annuity-based life insurance plans, then you will be receiving monthly pensions once your policy matures. With the help of an insurance policy, you can balance your portfolio and mitigate financial risks.
A life insurance policy is not structured to be the best retirement product out there, but if you want to enjoy dual benefits on your policy, then this is the right choice for you.
- Tax benefits
Section 10 (10D) of the Income Tax Act of 1961 allows you to claim a tax deduction on a yearly basis against the premiums you pay towards term insurance. If you go by the old tax regime, you are allowed a deduction of up to Rs. 1,50,000 as per the act.
Ensure that your yearly premium does not exceed 10% of the sum assured in your term plan and that your insurance is active. Use an income tax calculator to run these numbers in advance and determine your sum assured number while buying the policy itself.
Get in touch with an insurance advisor today to understand all about term insurance plans. With their help, not only can you compare insurance policies from various insurance providers but also understand how to become an agent yourself to help others through the same dilemma. Give your family the gift of financial security and ensure that they will be cared for even in your absence!
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