A person always wants to secure the future of the family in any circumstance. The best way to do that is to help them financially as much as they can so that they do not need to think twice before making necessary expenses. If someone wants to secure the financial future, they must make investments in different types of assets or any monetary investment policy. A person could invest in different types of policies for being financially independent in the future and also for providing ample support to the family during emergencies. Many Life Insurance policies cover only the person to a certain amount. They have a specific maturity period, after which that amount is given back or the nominee in case of an uncertain event.
When it comes to Life insurances, the best way to secure the whole family’s future is to invest in a Term life insurance. If a person wants to support the family even after demise financially, this type of insurance policy is a must.
A term insurance plan is a type of insurance policy in which the sum insured is provided to the family of the policyholder in case of the policyholder’s demise. The term Insurance policy provides a much bigger money cover than any other type of insurance policy. In this type of Insurance policy, the policyholder can also benefit because he gets a good rebate in terms of tax benefits under section 80C.
In terms of insurance plan, the premium amount is less, and the maturity benefits at the time of the policyholder's demise are high. Not only is this, the premium amount, which is to be paid during the lifetime of the policyholder, also nominal and easy to budget. The premium paid for the Term Insurance plan can be filled for Tax return as it comes under Section 80 C.
|General Life Insurance||Term Life Insurance|
||1. The tenure for Term Life insurance is not fixed as it depends on the lifetime of the policyholder.|
||2. The amount of money received by the nominee of the policyholder is much higher than general life insurance.|
||3. The premium amount in a Term insurance policy is much less than any other type of Insurance policy.|
Term insurance plans have certain benefits other than giving protection to a person's loved ones even after demise:
First and foremost importance of Term insurance is to create a secure future for a person's family. In this era of more nuclear families, it is very rare for a relative to come forward and take care of a family after they have lost their only earner.
The term insurance scheme gives that person a peace of mind in a way that even after his/her demise, the family will not be dependent on anyone and they can easily take care of their essential expenses. Moreover, when it comes to the future of the country’s economy, one can never be sure about the amount of money that can be needed by the next generation to sustain their lifestyle considering the high rate of inflation every year.
Other plans, such as general life insurance or an endowment plan, give only a certain benefit when a policyholder is a middle-class person. Still, in case of term insurance, the amount is always much higher than the other insurances, and hence it could help in beating the future market conditions.
Term Insurance is the most affordable insurance scheme. Most of the term insurance schemes start from as low as INR 200 per month. The premium is dependent on the age in which the person enrols in the policy. The younger the person is lesser will be the premium per annum and older the person is more will be the premium. This is also dependent on the amount that someone is willing to insure. Higher the amount, the higher will be premium.
This affordable rate helps even a basic salaried middle-class person to take advantage of this type of insurance, and it can help in securing their family's future. The premium payments can be made according to the policyholder's comfort. It could be monthly, yearly, or even quarterly based, whatever type of payment option they opt for while taking the scheme.
Term insurance does not only give a good return at the time of the insurer's demise, but it can also be used as a tax-saving tool. According to Section 80C of the Indian Income Tax Act, all the premium that is paid for a term insurance scheme can be applied for a tax rebate from the government. The maximum claim that a person can get for their paid premium is up to 1.5 Lakh. Even at the time of the policy's maturity, the benefits offered can also be tax exempted under Section 10(10D).
Some term Insurance schemes are also time-based; in those cases, if the insured survives the whole tenure of the policy, he does get a lot of maturity benefits in return. One of such schemes includes the TROP (Term Return of Premium plan). This is also lucrative when thinking about buying a long term policy, which could give a good amount of return in the later years of a person when the sources of income are very low and financial support is much needed for them and their family.
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In the Term insurance plan, the premium amount is very low, and the maturity benefits at the time of the policyholder's demise are very high. Not only is this, the premium amount, which is to be paid during the lifetime of the policyholder, very nominal and easy to budget. The premium that is paid for the Term Insurance plan can be filled for Tax return as it comes under Section 80 C.