Buying a Term Insurance Plan is the most Economical Way
Most of the people don’t go for a life insurance plan because they see it
in their list of expenses and they don’t find it as a cost effective way to
spend money. People want return to be higher than every single penny spent and
that’s the reason why low premium and high coverage are the keywords while
searching and comparing different Insurance policies. For such
requirements, Term insurance policy fit like a glove in your financial plan.
Term Insurance is a traditional life
insurance plan which acts as a financial protection for the family of the life
insured in case of his death within the term policy. It gives the sum assured
or what we can say death benefit on the demise of life insured to then nominees.
Following are some of the special
features which make term insurance as the most economical way to get protection
for your loved ones: -
Low Premium, High Coverage
Term Insurance Plan comes with low
premium because it is a pure form of insurance which serves its sole purpose-“protection
against risk of life” with no return on investment and maturity benefit. Not
only low premium rate, but on comparison with other plans on the basis of high
coverage, you will find Term Plan at the top of your preference list. With Low
premium and higher coverage than other plans, it becomes an economical option
of insurance.
Flexibility
Term Plan comes with the flexibility
to customize your plan with different options which contributes towards making
term insurance policy an economical option.
Following are some of the flexibility features
for Term Insurance Policy
- Choose your term
You don’t
have to go for a lifetime coverage in this plan. You can choose your term
policy like for 10, 15, 20 years and pay premiums according to your chosen plan
which makes term plan availability for people with a low financial budget also.
This flexibility option also helps in risk management against the loan taken
for a long period of time.
- Convertibility
You don’t
have to stick to the term insurance plan
during its period if your needs changes. You can convert your term insurance
plan into regular life insurance policy easily. But the availability of this
feature is only available if premiums have been paid on time and you have been
following the conditions of the policy. In the same case, you don’t need to go
for any extra screening while converting your term insurance policy into a
permanent insurance policy.
- Reduce additional coverage
Some term
insurance plan gives you the option to reduce your additional coverage which
reduces the premium also after a certain age. For example, Govind bought a life
insurance plan when he was young and he added additional coverage on critical
stages of his life. But now Govind is 46 years old and his two sons are well
settled and he feels like he doesn’t need additional coverage anymore, then he
can reduce additional coverage and enjoy low premium.
Premium according to age
At a young age, we don’t have that
much financial budget to pay high premiums, but term plan comes with “premium
according to age” feature which means lower the age, lower are the premium. For
example- If Ramesh (22 years) and Nitini (28 years) go for a term insurance
plan, then premium of Ramesh will be less than Nitin. Premium in term plan is
based on the current age of the insured person.
Tax Benefit
Term Plan gives you a tax benefit on
the premiums paid under section 80C of the income tax act which makes it a tax
saving tool also.
With such flexibility and benefits,
going for a term insurance plan will always remain as one of the most important
steps towards securing future of your loved ones in the most economical way
possible.
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