One of the most fundamental necessities for a person today, is to build their finances in a way that sustains them not only in the present but also in the future. A term insurance plan is one of the ways to achieve that security, where a person is able to ensure the protection of those dependent them; by choosing to insure themselves in the event of their death or illness.
To prepare for one’s future, and secure a financial support system for one’s dependents is a necessary practice that has fortunately become more prevalent in a post-pandemic world. Financial planning for oneself and their loved ones is a non-negotiable aspect of living at times of inflation and high-living costs. To find insurance solutions fit for their situations and to help make it better, investors look for term plan comparison which determines which term insurance is the best within the abundance of options that exist within the diverse insurance market in India.
A term insurance plan is made to effectively cover the needs of the insured and their dependents through an assured death benefit sum in the event of the policyholder’s demise. A basic term insurance plan in India is considered to be one of the most affordable means of securing one’s future where premiums are low and one can customise their coverage, add riders and choose payout patterns according to their needs.
The reason to invest in a strong term insurance plan is to mitigate the possibility of financial duress caused by various factors that may be unforeseen, or may be developing with time. Let us look at the ways buying a term insurance plan can secure your family from the following circumstances:
Financial Support in Death
The goal of investing in a term insurance plan is to ensure that the family, or beneficiaries of the policy are able to fulfil their monetary obligations without interruption even when the insured person dies.
One can expect to receive a death benefit sum over nominal premiums costs; this can help the beneficiaries to meet their expenses, pay off any outstanding debts or even fulfil educational expenses without compromising on their goals. The best term insurance policy eases any financial strain on the beneficiaries especially if they are not capable of replacing the income that the insured was earning to sustain the family.
The financial support provided by a term insurance plan is not limited to death or maturity. One can add supplementary riders to their existing plan for situations such as accidental death, disability, critical illness, and waived premiums for a price that is added over and above the premium cost.
Coverage Adjusted for Inflation
An added benefit of investing in a term insurance plan is the possibility of helping to secure the future of those who will be dependent on the policyholder. Many insurance providers offer special features where there are extra benefits and coverage added to the existing plan at important dependent-oriented moments in the policyholder’s life such as getting married or having a child. The coverage provided when the policyholder gets married is boosted by 50% and 25% on the account of the birth of a child. These supplemented costs are covered by a higher premium to be paid by the policyholder.
Reduced Tax Liabilities
The premiums paid for a term insurance plan and the payout sum thus received from the same at the time of maturity is exempted from taxation under Section 80C and 10(10D) of the Income Tax Act, 1961. Therefore while determining the best term insurance policy in terms of features, it can be expected to be an optimal insurance plan that has its own investment benefits as well. One is able to build a supplementary financial resource for their dependents in the future, which is exempted from taxation and market risks.
Protect Long-term Goals
The most recurring expenses that a person may have in the course of their lifetime are mostly driven towards day-to-day bills and financial liabilities. However, a person may have long-term goals such as education, property investments, marriages or travel that have to be prepared for, well in advance. The pursuit of these goals is something that drives a person or family to build their capital and increase their income.
In the event that a person meets an unfortunate accident or dies before securing an adequate financial corpus to achieve these goals, a term insurance plan and its monetary benefits can be used to fulfil these goals and expenses. It helps the beneficiaries in the face of financial distress, while keeping them from having to sacrifice on their long-term goals and investments.
Since the end goal of a term insurance plan is to achieve complete coverage and protection from any financial distress, one must choose carefully taking all factors into consideration and also understand the features that make it the most suitable financial solution to a secure future for one’s family.