Benefits of
Term Insurance
  • Offer financial security to family
  • Various rider Various rider options available
  • Maturity benefits under term insurance
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Benefits of Term Insurance

A Term Insurance Policy is a type of Life Insurance Policy solely designed to protect your family in your absence. The plan pays a guaranteed Death Benefit if the Insured dies within the policy tenure.

If the family's sole earning member invests in a Term Insurance plan and then succumbs to death, unfortunately, the Term Insurance policy helps to compensate the family for the financial loss. In the absence of the breadwinner, the Best Term Insurance Plans provides a financial corpus to the family to meet their financial demands and ambitions.

For instance - Mr. Ram. who is the only earning member of the family, dies at an age of 40. Unfortunately, he did not invest in a Term Insurance plan. Take a look at the consequences that can arise:

1) How will his family fulfill their needs in his absence?

2) What about his children’s higher education?

3) How will his family financially cope with a financial emergency?

Such questions highlight the importance of Term Insurance, as it provides financial protection to your family in your absence.

What are the Benefits of Term Insurance

A Term Insurance policy provides various advantages that make it a must-buy. Here are some of the most significant benefits that you must know about:

  • High Sum Assured at Affordable Prices:

    It promises a high-value Life Cover. For Instance - to gain a better understanding, we have compared the premiums of the HDFC Click 2 Protect for the different Sums Assured at the age of 30 years. Take a look:

    AgeSum AssuredPolicy TenureMonthly Premium (in Rs.)
    30 Years50 Lakh30 years629
    30 Years75 Lakh30 years848
    30 Years1 Crore30 years1,024
    30 Years1.25 Crore30 years1,222

    Take a look at the below-given graph for an idea of how the premium increases with increasing sum assured:

  • Comprehensive Coverage:

    Today's Term Insurance Plans offer a variety of coverage options, rather than just covering the risk of premature death. You can choose from a variety of plans available under Term Insurance plans and get coverage for the following events:

    • Terminal Illness
    • Accidental Death
    • Critical Illness
    • Accidental Disablement
  • Customizable:

    Nowadays, Term Plans come in different variants. You can choose the coverage benefits of your policy as per your needs. These variants provide flexibility in paying premiums as you can pay the premium regularly or in a single installment as per your affordability. Even when it comes to the death benefit, many term insurance plans provide you the option of getting it in a lump sum, monthly payments (uniform or increasing), or a combination of the two. As a result, you can customize your term insurance coverage to meet your specific needs and obtain the best policy.

  • Easy Availability:

    Both online and offline options are available for Term Insurance. As a result, you will have no trouble in finding and buying the policy. Buying Term Insurance through an online platform is much easier for you as you can buy the policy from your own home or office. You can visit the Insurance Company's website, enter your details, and buy the policy you want. Alternatively, you can visit PolicyX.com and compare many Term Plans available, choose the best policy, and buy it online in a few simple steps. Thus, buying a term plan is simple, allowing you to invest in one conveniently.

  • Financial Security:

    A term insurance policy's main objective is to provide financial security to you and your family. If your family receives financial assistance from a term insurance policy in your absence, they can meet their lifestyle needs. Your children will be able to receive the education they require, and your family will be able to meet its financial obligations.

  • Life Insurance Banner

    Life Insurance Banner

  • Tax Benefits:

    Term Insurance plans are tax benefit plans that provide you with Tax Benefits at the time of purchase as well as when the plan benefit is paid. The premium you pay in a Term Insurance policy allows you the deduction under Section 80C of the Income Tax Act, 1961. If the premium is up to 10% of the total sum assured, you can claim a deduction of up to INR 1.5 lakhs under Section 80C. Your family will get a fully tax-free death benefit. Moreover, if you choose a return of premium term plan, the premiums you receive on maturity will be tax-free under Section 10(10D) of the Income Tax Act, 1961, as long as the premium does not exceed 10% of the total guaranteed.

    • Section 80C:

      The Income Tax Act allows you to claim tax benefits on the premium you paid for the policy. The premiums paid for term insurance, up to a maximum of INR 1.5 lakh, are tax-deductible under Section 80C of the Income Tax Act 1961.

    • Section 10(10D):

      The maturity benefits offered under the Term Insurance policy are also eligible for tax exemption under Section 10(10D) of Income Tax Act 1961.

  • Maturity Benefits:

    A Term Insurance plan only offers death benefits to the beneficiary of the policy. However, Plans such as TROP (Term Return of Premium Plan) offer maturity benefits in the form of the return of premiums if the insured survives the entire term of the policy.

  • Accidental Death Benefit Coverage:

    Accidents can occur at any time and can result in death or dismemberment. So, you can add a cover of an Accidental Death Benefit. You can add this rider to your term insurance policy to give additional benefits or coverage in case of an accident resulting in death or dismemberment. As a benefit of a term insurance policy, the amount promised is paid to the beneficiary in a lump sum according to the contract.You can add an accidental death rider to your Term Insurance Policy when you buy it or later if you want to avail the advantages of it.

Benefits of Term Insurance Plan

Below-mentioned are the benefits of term insurance plans:

  • Low Cost of Premium

    A term insurance plan allows you to acquire a high sum insured amount at a low premium price. Moreover, the earlier you purchase, the lower the premium you will pay.

  • Tax Benefit

    One of the biggest benefits of a term insurance plan is tax benefits. Premiums are paid toward a term insurance plan as well as the money received on death is exempted under Section 80C and Section 10(10D) of the Income Tax Act of 1961.

  • Rider Options

    Policyholders can increase the coverage benefits of their term insurance plan by adding multiple optional riders to their existing term insurance plan. Following are the optional riders offered under term insurance such as Terminal Illness Cover, Accidental Death Benefit, Critical Illness Cover, Daily Hospital Cash, Personal Accident Cover, Waiver of Premium, Partial/Permanent Disability Cover, and many more. Riders come at the cost of an additional premium.

  • Financial Protection

    In the event of the policyholder's death, the insurer will pay the pre-determined sum assured amount to the policyholder's family as a regular payout or a lump sum.

Conclusion

There are various different term insurance plans available in the market, and each of them has its own set of benefits. This nature of plans allows you to live a peaceful life with an assurance that your family will not have to suffer if something wrong happens to you and will take care of every big or small need of your family members without making them dependent on others.Therefore, it is important to have to ensure that you and your family live a peaceful life in every situation.

Written By : Naval Goel

Last Updated : March, 2022

Naval Goel is the CEO & founder of PolicyX.com. Naval has an expertise in the insurance sector and has professional experience of more than a decade in the Industry and has worked in companies like AIG, New York doing valuation of insurance subsidiaries. He is also an Associate Member of the Indian Institute of Insurance, Pune. He has been authorized by IRDAI to act as a Principal Officer of PolicyX.com Insurance Web Aggregator.

Find Out What the Customers Are Saying

(Showing latest 5 reviews only)

- 4.2/5 (548 Total Rating)

February 24, 2022

navneet dubey

Agra

i am only earning member of my family so term insurance is very important for me. I checked about this company and asked my friends and relatives and they all gave me good response about them. I am happy.

February 24, 2022

shivani kashyap

Mumbai

Max life is a reputed company for a reason. They always take good care of their clients without delaying their requests and claim. I am impressed

February 24, 2022

prem khanna

Jaipur

I am here to write my experience with aegon insurance company. I always got satisfactory support from the company and their customer care people. They are educated and polite.

February 24, 2022

neha singh

Cuttack

I am a single mother with 2 kids. I always think about the future of my kids. Thats why i invested in term insurance plan with PNB as their claim settlement ratio is good so i am sure that my money is saved

February 24, 2022

mohit khanna

Madurai

I have a home loan, a 4 year daughter, old mother and wife. I am a salaried person and always worried about future saving for them. TATA gave me a good cheap plan that fulfills my wishes for furture

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