Life is a bold journey with unexpected twists and turns, and these uncertainties heighten the importance of proactive financial planning. Term insurance, the purest and simplest form of life insurance, emerges as a vital tool to protect your loved ones from a financial crunch in your absence. This article will give you a detailed guide about term insurance.
How Does Term Insurance get Work?
When you opt for term insurance, the insurance company will offer you comprehensive life coverage at affordable premium rates. You pay premiums regularly to keep the policy active for a period known as the term. You can choose the term of coverage based on your needs; it could be 10 years, 20 years, 30 years, or more. If you pass away during the term, a death benefit is paid out to your beneficiaries.
Why Do You Need Term Insurance?
Let us have a look at the reasons why you need term insurance.
1. Financial Protection
Having a term plan in place ensures your family does not struggle financially if something unfortunate happens to you during the policy term. Your family will get a sum assured to pay their expenses, such as education, outstanding loans, daily expenditures, etc.
2. Customisable Option
You can buy term insurance and customise it based on your needs. Many insurance providers offer riders, such as accidental death, critical illness, and more, which enhance your base plan coverage.
3. Comprehensive Coverage
Term insurance provides comprehensive coverage at affordable premiums. As this insurance plan requires no investment, you will pay a lower premium than other life insurance plans, such as whole life, endowment plans, etc. Furthermore, you can use the term insurance calculator to discover the coverage amount and how much it will cost.
4. Peace of Mind
While you cannot forecast and control the unexpected events in your life, you can mitigate the financial impact of such events. You can opt for term insurance and get peace of mind, knowing your family will be financially secure if anything happens to you.
- Tax Benefits
Another reason for getting term insurance is to avail of tax benefits under Section 80C and Section 80D of the Income Tax Act 1961. You can claim deductions of up to Rs. 1,50,000 per year under Section 80C from the premiums you pay. Moreover, you can claim tax deductions up to Rs. 25,000 under Section 80D of the Income Tax Act, 1961, for the premiums paid for term insurance with riders, like critical illness cover.
How to Buy Term Insurance Online in India?
Buying term insurance online in India is a simple and hassle-free process, which you can execute by following this easy step-by-step guide:
Step 1: Visit the official website of your preferred insurance company and create an account by entering your details.
Step 2: Choose the ‘Term Insurance’ option and provide your information, such as name, contact information, annual income, date of birth, health issue, medical history, etc., and click the ‘Check Price’ option. Accurate information about your health and lifestyle is crucial when applying for term insurance to avoid claim rejections.
Step 3: Enter the insurance amount, premium payment term, and other required details according to your preference and click the ‘Proceed’ button.
Step 4: Select the payment method and click the ‘Pay’ option to make payment via your debit card, credit card or UPI.
Step 5: You will receive the term insurance policy in your registered email address after payment.
However, please note that it is a generic procedure to buy a term insurance policy in India, which may differ from one insurer to another.
Final Word
Securing your family’s financial future is crucial. Term insurance offers your family the support they require in your absence. Besides tax benefits, financial protection, and comprehensive coverage, term insurance provides immense peace of mind, knowing your loved ones are protected.
