Gone are the days when people would invest in the most affordable term insurance plans to get tax benefits. These days, people buy term insurance policies to secure the future of their families. Term insurance acts as a great support to families who lose their sole breadwinner. They get the kind of financial support through the term insurance plans that only their family could give them. If you want to know more about the benefits of term insurance policies, here are some of them mentioned for you.
Better coverage at an affordable premium
One of the term insurance benefits is the affordable premium that you have to pay for the plan you have bought. And if you are buying the term plan early in your life, you will be able to pay a lower premium while getting a higher sum assured. If you want to get the best deal, you can try buying the term plan online, rather than offline.
Easy to comprehend
Unlike other life insurance products, it is very easy to understand the features of term insurance policies. Term insurance policy is a pure life cover; thus, does not have an investment factor in it. If you consistently pay the premiums, you will get coverage for a fixed duration.
Several death benefit payout options
The multiple payout options play a vital role. Most of us take a home loan or personal loan. In case of our sudden demise, our family members may find it extremely challenging to carry the financial liabilities and deal with the debts. This is where the several death benefit payout options help. The financial liabilities can be taken care of by the lump sum amount the family will get on the unfortunate demise of the policyholder.
Some term insurance policies come up with the option of monthly income along with the lump sum amount. This is offered as the death benefit. This monthly income helps the families to manage their expenses.
When you buy a term insurance plan, you will also get additional riders. You can buy those riders by just paying an extra premium at a nominal amount. This as a whole will enhance the term insurance benefits that you receive.
With term insurance plans, you can enjoy tax benefits. The premiums that are paid for the term insurance plan are tax-deductible, and along with that, the payouts are also tax-exempted.
Term Insurance Benefits under Section 80C
The premium paid by the policyholders to purchase a term insurance plan is tax exempted up to INR 1.5 lakhs a year, under Section 80C of the Income Tax Act 1961. Under this section, you can get the maximum tax benefits on term insurance. However, it also depends on your age and health.
Term Insurance Benefits Under Section 10(10D)
Under the provisions of Section 10(10D) of the Income Tax Act 1961, the death benefits that the beneficiaries get from the term insurance plans are completely exempted.
Critical illness coverage
At any point of time in our life, we may suffer from any critical illness. The treatment that one has to undergo to fight critical illnesses can be quite expensive. If you go through the primary benefits of the term insurance plans, you will find only life cover. However, adding riders to your term plan can enable you to get critical illness coverage. The coverage will help you to get the necessary treatment without spending all your savings.
Accidental death benefit coverage
We may meet with an accident at any point of time in our life which may even result in death. This is why you can buy accidental death benefit coverage. The beneficiary of the policy will get better benefits with this kind of rider.
Option for return of premium
When you purchase a pure term insurance plan, the nominee will get benefits only on your demise. And if you survive through the policy, you will not get any benefit. This is why the return of premium option can be opted for to get at least the maturity benefit. You will certainly have to pay higher premiums under this option but at least get back the total premium amount on maturity of the policy.
Now if you want to know about the term insurance policies that are available in the market, you can visit the website of IIFL today. You can come across several options for term insurance policies and choose the one that suits your needs.