There is not much that you can do to protect yourself and your family from the uncertainties of life. However, having a life insurance policy is one of the few ways to ensure that your loved ones can continue to pursue and achieve their life goals even in your absence. Term insurance, the most affordable type of life insurance, is a popular choice for those seeking a robust life cover. This article might assist you if you are unclear about how to get started and acquire term insurance online or offline.

What Is A Term Plan?

A term plan is an affordable life insurance policy that can help you protect your family's financial future. If you choose term insurance, your nominees will be entitled to a death benefit if you die during the policy term. There are no maturity benefits in a pure term plan.

What Benefits Can A Term Plan Provide?

The primary reason for purchasing term insurance is to protect your family if something unexpected occurs to you. For example, if you are the primary or sole breadwinner in your family, chances are your loved ones would be unable to achieve their life goals in your absence. A term plan can assist you in meeting this demand because the death benefits paid out by the insurance provider can help your family get through difficult times.

  • Comprehensive Life Cover With Low Premiums

Because term plans are pure life insurance, their premiums are very inexpensive. Furthermore, term plans provide a large sum assured, effectively offering you the benefit of a high life cover for low, affordable premiums. The earlier you buy a term policy, the lower your premiums will be.

  • Tax Exemptions

Term insurance also provides tax advantages to the policyholder. Section 80C of the Income Tax Act, 1961, states that the premiums you pay for the term plan are deducted from your total taxable income up to ₹ 1,50,000. Furthermore, death benefits are tax-free, subject to the rules of section 10(10D) of the Income Tax Act of 1961.

  • An Income Source For Your Family

If chosen to be availed in monthly installments, term insurance payouts can also serve as a source of income replacement for your nominee(s). This can assist them in achieving not only their main life goals but also their day-to-day needs while you are away. Infosys Warns Its Employees Against Moonlighting; Says Dual Employment Can Lead to Termination.

How To Choose The Right Term Plan?

There are some critical considerations while selecting a term insurance plan. Let us gloss over them.

• Your Family's Requirements

Your family's requirements are essential to consider when choosing a term plan. Your dependents' demands will change as they progress through life stages. For example, your elderly parents may want financial assistance to cover their daily costs after retirement. In addition, admission to a top university may be one of your children's many life ambitions. These will factor in deciding the apt life cover amount you require. Once you calculate the cover amount required, you can get an estimate of the premiums you will need to pay for that amount using an online term insurance premium calculator.

• Your Debts And Liabilities

In the course of your life, if you have taken a home or a personal loan, you may now be repaying the debt with your earnings. However, if something unfortunate happens to you, your family may be unable to meet these responsibilities. Your term insurance coverage can help them get through these difficult times.

Before you get a term policy, you should assess your debts and liabilities. The plan you select must give appropriate coverage to assist your family in repaying your debts in your absence.

• The Claim Settlement Ratio Of The Life Insurance Company

Another key consideration while buying term insurance is the life insurer's claim settlement ratio. This figure effectively represents the number of insurance claims settled by the life insurance provider against the total claims received in a particular year. A greater claim settlement ratio is a good sign because it indicates that the insurer is keeping their end of the insurance contract. While at it, you may also investigate the insurer's financial stability and solvency ratio to determine whether the insurer is likely to pay benefits to your nominees on time. FM Nirmala Sitharaman Compares India Inc to ‘Hanuman’, Asks Why It Is Hesitant To Invest in Manufacturing.

• The Term Of Your Plan

The ideal term plan should last at least till the time you retire. If the duration of your plan coincides with the years when you receive a consistent income, you will find it easier to pay your term insurance premiums. This, in turn, ensures that your policy does not lapse and that your dependents can benefit from the term insurance benefits specified in the policy.

• The Method Of Purchase

Some plans may only be offered offline, while others may only be available online. Online term plans have become increasingly popular because of their lower cost. Purchasing term insurance online also makes it easier for your nominees to file a claim in the case of your death, as it may be done immediately through online channels. So, before you choose a term plan, consider if you are more comfortable purchasing online or offline, and then choose your term insurance policy accordingly.

• Riders

Riders are add-ons that can be included in your term insurance policy at the time of buying. They can enhance the scope of your base policy and provide additional cover for critical illnesses, accidental death, and total or partial disability, among others. You must check which riders can be included in your plan (they vary from plan to plan and from one insurer to another) and add the appropriate ones to have a comprehensive policy in place.

Conclusion

Choosing the right term insurance plan is critical because it can help provide financial security for your family. Moreover, because term insurance premiums are low, it is simple to acquire a policy even if you have only recently started your professional journey. Therefore, getting a term plan at the earliest in life is advisable to protect the future of your family's dependent members.

Before choosing a term plan, make sure you evaluate all the factors discussed so you can make an informed decision.