Expenses associated with medical care have been on the rise at an alarming pace and the standard of living individuals can avail of has also begun to rise in recent times. The Coronavirus pandemic has acted by further compounding these expenses. Readers are encouraged to buy themselves term insurance such that they as well as their family are protected with a layer of financial coverage. This is particularly vital for those who serve as the sole earning members of a family.
Understanding What Term Insurance Is –
Acting as one of the most financially friendly forms of life insurance available in the market today, availing of term insurance is a must. This form of insurance operates by requiring policyholders to pay a premium. The insured individuals are then provided with coverage for a period of time that has been specified in their term insurance plan which has been selected by the policyholder keeping in mind their preferences. In the event that a policyholder dies within this specified period of time, their bequeathed nominees are given a death benefit that is paid via the company that issued the term insurance policy to the policyholder.
Examining the Scope of a Term Insurance Premium –
A term insurance premium is used to specify the amount of money meant to be paid by the insured individual to the insurance company issuing the term insurance policy. This premium may vary in accordance with the sum assured the policyholder seeks to ultimately gain from their plan.
Benefits Term Insurance Provides Policyholders and their Family Members –
Apart from being an economically viable form of insurance, term insurance is advantageous for a policyholder and their family for a number of reasons the most apparent of which have been examined below.
Healthcare Benefits – As one ages, they become more susceptible to falling sick and may require more amounts of medical attention. With the aid of a term insurance plan, the family of a policyholder of term insurance can afford to avail of the best medical attention without having to worry about depleting their resources.
Tax Benefits – As per Section 80C of the Income Tax Act of 1961, insured individuals are entitled to substantial tax benefits and deductions. This includes a deduction on the premiums paid up to an amount of INR 1.5 Lakhs per annum. Moreover, tax liable to be paid only comes into effect once the policy matures and the sum assured is dispensed to the policyholder or their family. This allows for policyholders to save the money that is meant to be taxed for a long period of time thereby allowing them to add to their savings.
Provide Funds When Retired along with Living Benefits – Once an individual retires, they may not have access to a steady stream of revenue in the form of a salary. Term insurance provides living benefits to its policyholder thereby allowing them to enjoy their retirement years.
Term insurance provides a much-needed layer of financial security in addition to easing up on any worries people might have about their medical as well as general living expenses. Readers may use a term insurance calculator (available on Finserv MARKETS) to understand and compare the premiums they have to pay for a plan