What are the Benefits of Term Insurance?
Following is a list of benefits that a term insurance policy can provide you:
- High Sum Assured at Affordable Premium
- Easy to Understand
- Multiple Death Benefit Payout Options
- Additional Riders
- Income Tax Benefits
- Critical Illness Coverage
- Accidental Death Benefit Coverage
- Return of Premium
1. High Sum Assured at Affordable Premium
A term insurance plan is a simple form of life insurance.
One of the primary term insurance benefits is its affordable cost. As
compared to other life insurance policies, a term insurance plan is
available at a premium that you can easily afford. Another important
term insurance benefit is that the earlier you buy term insurance, the
lower will be the premium. Furthermore, the premium while buying term insurance online may be lower than buying it offline.2. Easy to Understand
While
buying a life cover, you may find it difficult to understand the
insurance-specific terms about various life insurance policies. One of
the prime features of term insurance plans is that they are quite easy
to understand.
As a pure life cover, a term insurance plan does
not have an investment component in it. You pay the premiums, and the
insurer covers your life for a fixed duration to offer the term
insurance benefits.
3. Multiple Death Benefit Payout Options
You may be paying the EMIs of your new home, car, or a personal loan you have borrowed. In your absence, your financial liabilities may fall on your family members. It is where the various payout options of term insurance policy play a vital role.Your dependents may get a lump sum amount in case of your unfortunate demise and this lumpsum will help them to manage the aforesaid financial liabilities.
4. Additional Riders to Strengthen the Policy
Term
insurance plans come with riders that you can choose to enhance the
basic term insurance benefits. You can add these riders to your term
insurance plan by paying a nominal additional premium.
For
example, the Max Life Waiver of Premium Plus Rider [UIN: 104B029V03]
from Max Life Insurance provides you waiver of all future premiums in
case of dismemberment and in case you are diagnosed with the any of the
specified critical illness [1]. This means your life cover will continue
even when you are not able to pay the premiums for your policy.
5. Income Tax Benefits
Term
insurance plans also provide tax benefits. While the premium you pay
for a term insurance plan is tax-deductible, the payouts also come with
tax exemptions as per the existing tax laws.
Term Insurance Benefits under Section 80C
UnderSection 80C of the Income Tax Act 1961,
the premium you pay to buy a term insurance plan is exempt, up to a
limit of Rs.1.5 Lakh in a year. You can get maximum term insurance tax
benefits under this section by purchasing the plan for the maximum
coverage offered to you based on your age and health.
Term Insurance Benefits Under Section 10(10D)
The death benefit of term insurance plans is fully exempt as per the provisions of Section 10(10D) of Income Tax Act 1961.
6. Accidental Death Benefit Coverage
Accidents can happen at any time and may lead to death or dismemberment. So, you can add an additional cover using Max Life Accidental Death and Dismemberment Rider (UIN: 104B027V03; Non-Linked Non-Participating Individual Pure Risk Premium Health Insurance Rider).Max Life Accidental Death and Dismemberment Rider (UIN: 104B027V03; Non-Linked Non-Participating Individual Pure Risk Premium Health Insurance Rider) from Max Life Insurance safeguards the financial future of your family in case of accidental death or dismemberment. You can add this rider to your term insurance policy to provide additional term insurance benefits or cover in case of accident leading to death or dismemberment. [2] The sum assured is payable to the beneficiary in a lump sum as per the contract as the benefits of term insurance policy.