As an earning individual, you must have heard numerous people advise you to get a term life insurance plan. However, when you come to think of it, you may wonder if term insurance is really worth it. Yes, it financially secures your loved ones and offers affordable premiums, but does it benefit you? This is the question we shall explore today! Term life insurance is a policy that financially safeguards your dependents in case something were to happen to you. So, instead of relying on your savings and emergency funds, you can have a monetary backup meant for your family in the event of a mishap. Read further to learn the pros and cons of term plans and who should opt for them.
One of the vital perks of term insurance is the simplicity of the product. When compared to other life insurance policies that come with savings or an investment component, a term plan doesn’t require you to deal with jargon and complex concepts. In term insurance, the objective of the plan is simple and easy to understand.
All you need to do is understand the financial requirements of your dependents and pick a sufficient sum assured amount. The premium rate shall be cost-effective, and thus, you can have peace of mind. The sheer simplicity of such an insurance product makes term plans an attractive option.
While looking for an investment instrument, most of us would prefer a cost-effective option, to begin with. In regards to the premium rate, term life insurance provides an affordable way of securing your family. At a low premium amount, you can opt for a high sum assured which isn’t possible with other insurance plans.
Hence, you can select a suitable coverage sum to protect your loved ones without having the investment burn through your savings. Estimate how much you need to pay for an insurance policy with our term insurance premium calculator now!
Though term insurance protects the insured from the risk of death, it also covers other pre-decided aspects. You can gain this additional coverage by combining your term policy with rider benefits. Be it the diagnosis of a major ailment, accidental death or loss of income, add-on covers have got your back.
Moreover, these add-ons must be purchased separately from your insurance premium to enhance your plan. At Bajaj Markets, you can easily opt for such lucrative add-ons at affordable prices!
Apart from the obvious advantages of term insurance, it also acts as a good tax-saving tool. The premiums paid towards term policies can be claimed under Section 80C of the Income Tax Act, 1961. Here, the maximum cap on the claim amount is ₹1.5 lakh per financial year.
Furthermore, you can claim the death benefit under Section 10(10D) of the Income Tax Act, 1961 as tax-free. So, you can save money on taxes by choosing a beneficial investment option to protect your family.
Here are some limitations of term insurance policies that you must be aware of:
Purchasing term insurance as a senior citizen or at an older age can be difficult. Most insurers will not cover you so late in life or else, set specific conditions to avail a term plan
The term insurance premiums tend to increase with age and thus, opting for coverage at an older age can be quite expensive
As term insurance is a pure life cover and has no cash value, you cannot fulfil life-stage goals
Term plans do not offer perks such as a loan against policy or insurance surrender value
Unlike other life insurance plans, term insurance doesn’t enable you to create wealth for the future
Term plans are suitable for every individual, but if you meet any of the following criteria, you should definitely head over to Bajaj Markets now:
Individuals who have dependents such as parents, spouse, children, siblings, etc
Individuals who want an affordable coverage option to safeguard their loved ones
Individuals who are the sole breadwinners of the family, started their professional life, or have a moderate income
People who want to secure their dependents in their absence from financial liabilities such as loans
People who want to leave a legacy behind for their family members
To ensure you make the most of your term insurance policy, you must avoid the following mistakes:
The dangers of being underinsured can be grave as it is the only financial backup you are leaving for your dependents. Thus, it is essential to check if the coverage is more than enough to suffice the needs of your family members. The rule of thumb for picking the sum assured is the coverage must be 10-15 times your annual income.
Though a short policy tenor translates to a lower premium rate, does it really cover you well? To opt for the right policy term, you must understand your insurance needs and choose the tenor accordingly.
Offering wrong information to the insurance provider can be counterproductive as it may affect your claim and your policy could be declared null.
When you are young, you may believe you don’t need term insurance because you have no dependents or you are single. But as you age, your responsibilities are bound to increase. So, it is best to get insurance early in life.
Riders are beneficial but assessing your needs is paramount. Hence, you must pick the right ones rather than going overboard and bearing a higher premium cost as a result.
Before opting for any type of insurance policy, it is best to assess your financial situation, life goals and responsibilities to pick the right plan. However, having life insurance coverage is a must to provide sufficient financial cushioning to your loved ones. So, head over to Bajaj Markets and explore our term insurance plans now to avail extensive coverage!
It is recommended to buy a term insurance policy early in life as the premiums are affordable and it enables you to get a high sum assured.
The type of insurance to purchase completely depends on your insurance needs. If you want a pure risk cover then a term plan is for you. But, if you want a savings component along with a life cover, you can explore whole life insurance policies. Learn more about term insurance vs whole life insurance on our platform!
If you survive the term insurance policy tenor, you do not get any benefits on maturity. However, you can opt for term plans with return of premium, which reimburses the premiums paid throughout the policy period on outliving the term.
Yes. Term insurance enables you to secure a backup to financially protect your loved ones. Thus, you can rest assured when it comes to the well-being of your dependents.
Yes. You simply need to visit our official website at Finserv MARKETS or the insurance app to buy term insurance online!