Term insurance is also known as a pure risk cover plan and it is one of the best insurance plans that gives you all the perks in a minimal budget. The term insurance plan is known as a risk cover plan because it mitigates most of the financial problems associated with any type of life threat arising to you. Along with mitigating the risk, it also helps your family member to overcome the financial damage that emerges due to that particular risk.
The early demise of the sole bread earner in the family causes a long-lasting emotional trauma to the family members and along with that, the financial burden also piles up in their list of worries. Although there is no way to overcome the emotional trauma as only time can heal, with a good term insurance plan, your family members will be able to easily maintain their lifestyle, meet their financial goals, and pay off liabilities in a seamless way.
With the help of additional riders, you can easily enhance the applicability of your term insurance plan. Term insurance comes with a long list of benefits that can be easily availed.
So, in this blog post, we will be looking at what makes term insurance an ultimate choice for all those people who are looking to secure the financial stability of their loved ones in case of any unfortunate event.
High Cover at Low Premium
The best part about buying term insurance is its low cost especially when you go for the online purchase of the term insurance. Most people think that buying insurance can prove to be a money-guzzler for them, but that’s not true in the case of a term insurance policy as it can easily fit like a glove into your watertight budget. You can buy a term life insurance policy of 1 crore at an economical premium of Rs.563 per month.
So getting a cover of Rs.1 crore by paying a minimal amount of Rs.563 is the best deal which you can go for. Most term insurance comes with high cover and low premiums, therefore there is no trick in opting for an economical term insurance plan.
Simplicity
Another good thing about the term insurance plan is its simplicity. Many people think that understanding the terms and conditions of an insurance policy is quite difficult, but it does not apply to the very simple and easy-to-understand term insurance policy.
Term insurance plans are not like endowment plans which integrate risk with saving and that’s what makes term insurance very easy to understand. All the insurance plans which are comprised of both risk cover and a saving plan are known as cash value plans. For a layperson, it is not always easy to divide the amount of premium he pays for risk cover and the amount that is piling up as savings. That’s why planning a financial risk cover with a cash value plan can be quite complicated.
On the other hand, term insurance is quite easy to understand; just pay the required premium and get coverage according to your chosen plan.
Flexibility
Along with the benefits of the term insurance policy, opting out of it is also quite easy. If you stop paying the premium for your term insurance policy, then your risk cover will cease and you will not be liable to pay anything as there is no saving element involved in the term insurance policy.
In the case of cash value policies, you get the full promised survival benefit only in the case of fulfilling the whole tenure of the policy. If you stop paying the premium in the case of cash value policies, then you will have to suffer a huge financial loss as you will not be able to regain your savings portion without particular deductions.
Tax Benefits
Most people think that an endowment policy is the best choice for tax saving as with more premiums it gives more tax benefits under the u/s 80C of the Income Tax Act. But you should be well aware of the fact that even with a low premium, the term insurance plan also falls into the category of benefits availed under the u/s 80C of the Income Tax Act. You can invest the difference in the premium between the endowment policy and the term insurance policy by putting your money in different insurance schemes like PPF, ELSS, etc.
Term insurance is a perfect choice for all those people who are looking to opt for an insurance policy that offers high coverage at lower premium rates. Along with that, the very popular term insurance policy is also very easy to understand and quite flexible. So instead of getting stuck with a complicated and costly insurance policy, choose term insurance and make your life simple.
