You often plan for your rainy days, your financial goals, your retirement, but forget to value what you really have, i.e., the present. You need to invest in your present in order to secure your future. This means that even if you are healthy today, you need to invest in a term insurance plan in order to ensure your family’s financial security in your absence. You don’t know what happens to you or your loved ones the next minute. There’s a possibility that your health deteriorates in the future or when you get old. Thus it’s good to buy a term plan now before it gets too expensive or you become uninsurable. Besides, here’s a list of reasons that shows why is it important to buy a term insurance plan irrespective of the state of your health.
Easy to understand
As compared to other life insurance plans, term plans are easy to understand. All you have to do is pay your premiums and get insurance coverage for the term period chosen by you.
If your budget is tight, then it’s ideal to buy a term insurance plan as it costs less than other insurance plans. Moreover, term insurance is good for a person who has a low income but needs higher coverage.
This is yet another significant benefit of buying a term insurance plan. Not only premiums paid for term insurance are less, but they are also eligible for tax benefits. You get to enjoy tax benefits on the premiums that you pay towards the term insurance plan as per Section 80C and Section 10D of the Income Tax Act, 1961. Tax benefits under the term insurance plan are as per prevailing tax laws that are subject to time to time amendments.
Lower premium rates
The premiums paid for term insurance plans are much less as compared to other plans. Therefore, buying a term plan is the best option for someone who gets a moderate income and is the only breadwinner in the family.
You get the option to cover your partner under the same policy.
It is important to have a term insurance plan if you are the only breadwinner in the family as a term plan offers coverage to your family if something unfortunate happens to you.
It offers financial coverage that takes care of your family’s financial liabilities in your absence. Thus, if you don’t want your family to compromise on their lifestyle in the future, then it’s good to buy a term insurance plan for your family.
Flexible premium payment option or term
A term insurance plan also gives you the flexibility to choose your premium payment option. Premium payments can be made either monthly or annually, depending on the choice of the policyholder. Also, you get the flexibility to choose your premium payment term that ranges from 5 years to 40 years.
Term insurance plans also come with add-on coverage options if you want to enhance the coverage of your policy. You can easily get a rider by paying some additional cost along with the basic premium of the policy.
Whole life coverage
A term plan offers financial security for a longer period of time. You get the life coverage option of up to 80 years along with in-built death and terminal illness death benefits.
On the whole, investors need to know that term insurance plays a very important role in your financial planning.