Term Insurance:
Know why it is important for you and how to choose the best plan
Term insurance can be an important part of your life, especially when you have big responsibilities and financial obligations. If you have taken a large loan, or have a family to depend on, you must take term insurance. Term insurance is the cheapest life insurance, in which more cover can be obtained by paying less premium. In today’s article, we will know what is term insurance, why it should be taken and how to choose the best plan.
What is term insurance?
Term insurance is a pure life insurance plan, which provides life cover for a fixed period of time. Only death benefit is available in this plan, but there is no maturity benefit. This means that if the policyholder dies during the policy term, the nominee receives the amount decided in the policy. For example, if you take a term insurance policy worth Rs 1 crore for 15 years, you will have to pay a premium of around Rs 7,500 every year. If you die during this time period, your family
Why should one take term insurance?
There are many reasons for taking term insurance, some of the main reasons are as follows:
- Covering large loans and financial obligations: If the policyholder dies, all loans and financial obligations can be settled with the amount the family receives through this policy.
- Providing financial security to the family: Term insurance provides a financial protection to the family, thereby providing them financial support after death.
- Lower premium and more cover: The biggest feature of term insurance is that it provides more cover in exchange for lower premium.
- Tax Benefit: Under this policy you also get tax exemption under Section 80C.
How to choose a term insurance plan?
Choosing a best term insurance plan is very important. For this you can keep the following points in mind:
- Choose a plan from the right platform
You can compare term insurance plans online from platforms like PolicyBazaar. With this you can get the best plan at a lower premium. Taking an online policy can also give you more discounts than an offline policy. - Check Claim Settlement Ratio
Claim settlement ratio tells what percentage of claims the insurance company has settled. For example, if HDFC Life’s claim settlement ratio is 99.1%, it means that this company has successfully settled 99.1% of its claims. - Select Add-on Cover
You can add some additional covers (Add-Ons) to your term policy, such as Critical Illness, Permanent Disability, and Accidental Death. This additional cover also protects you in case of illness or accident. - Payment Options and Premium Mode
You can choose single payment, annual, monthly or half-yearly premium mode as per your convenience. It will suit your budget and plan requirements.
Tax benefits related to term insurance
Another major advantage of taking term insurance is the tax benefits. Under Section 80C, you can get tax exemption on term insurance premium. Additionally, there is no tax on the claim amount you receive under Section 10(10D).
How to choose the best term insurance plan?
On PolicyBazaar you can compare term plans from different companies. Here you will get the plans of all the major companies at one place. You can compare plans based on their claim settlement ratio, premium amount, and cover period. After this you can choose the best plan as per your need.
conclusion:
Term insurance is an affordable and important life insurance plan that provides financial security to your family in your absence. While choosing it, you should keep in mind the right platform, claim settlement ratio, and add-on cover. Hopefully this article will help you in choosing a best term insurance plan.
Don’t ignore term insurance and choose the right plan for you and your family’s future today.