5 major benefits of having a term insurance plan
Have you ever imagined who will take care of your liabilities and responsibilities, if you are not around? It is when the significance of term insurance plan is felt. Term insurance policy is the minimum required to provide financial stability to your dependents in case of your sudden demise. In simple words, it’s the cheapest form of insurance which provides death benefits to the family of the insured person for a defined period of time.
It is important for everyone, especially for the bread earner of the family. Because, it will act as a real support for your family, if something happens to you. And the lump sum amount you will get as death benefit brings financial stability and pays off the liabilities. To understand these term plans, we need to take a look at them by going in depth. Hence, here are the few term plan benefits that you must know:
1- Flexibility: In case of term policies, if you stop paying premium, the risk cover comes to an end and thereby, the policy ends. This means there is nothing payable to you as there is no savings element in the policy. So, if you stop paying premiums in the mid-term, there is a financial loss as you cannot recover your savings portion of the policy without certain deductions.
2- Simplicity: Term insurance plans are that insurance plans which are very easy to understand, such as endowment plans which blends up the savings with the coverage of the risk. The plans which includes the coverage of risk are known as cash value policies. In simple words, term plan is defined as pay the desired amount of premium and get yourself covered under the term policy.
3- Tax Benefits: It has been said that if you buy an endowment type of insurance, as the premium is more, you can get more advantages under the section 80C of income tax act. In addition, when the maturity claim is paid, it also yields tax-free income. Besides, the difference in premium between term insurance and endowment insurance can also be invested in other tax schemes, such as ELSS, PPF.
4- Low premium: The premium for term plan is lower than that for cash value policies.
5- Competitive Pricing: On the basis of price, term life plans can be easily compared with each other as they are structurally similar and easy to understand.
So, what are you waiting for? Get a term insurance plan and save your family’s future. Also, there are a number of term plans available in the market, thus you can compare or buy term plan policy online from insurance various companies, such as Max Life Insurance