Term insurance policy: A must-have financial instrument


The uncertain pattern of events which occur in our life. Some surety can help you sail through the surprised both – pleasant and unpleasant which life offers. However, while you may be strong enough to take on life as it comes, your family may not be. Hence, securing them financially is not only your duty, but it is also a necessity. And what better you keep your family financially secured than a term insurance plan.

It is perhaps the most basic and cost-effective life insurance. Easy to buy, this insurance offers to protect the financial future of your family at a nominal cost. As compared to other insurances, the term insurance policy has fairly minimal insurances.

But, that’s not the only reason which makes term insurance policy a must-have. We have listed some more reasons which will make you opt for this policy.

Low premium:

When it comes to term insurance plan, you can have both – the highest death benefit or life cover. You can have them both in lieu of a nominal premium. Generally, the premium of a term plan is relatively lower as compared to other insurance plans. This policy comes with no ancillary benefits or investment element attached to it.

Increasing life cover term plans:

Another perk of opting for a term insurance policy is that term insurance policy offers an increasing life cover at set intervals. The increase in the cover is pre-defined and may differ from insurer to insurer. This feature allows you to increase the life cover in tandem with the increase in your income levels.

Riders can be added:

If you still find that your term insurance policy is not as lucrative as you want it to be, you can always add riders. These riders serve as the additional benefits which can be combined with the original policy in accordance with the nominal payable premium.

Income Tax Benefits:

A known benefit of term insurance policy is the tax benefits which come with it. Given the amount paid as premiums, you can avail a deduction of up to Rs 150,000 per annum under Section 80C of the Income Tax Act 1961. Furthermore, the death benefit which will be received by your nominee is tax-free under Section 10 (10D) of the Income Tax Act 1961.

Term insurance premium calculator:

When it comes to planning your financial goals, the term insurance premium calculator can come in handy. It allows you to understand the premiums which you will be paying out every month or the selected time interval. All you have to do is submit the necessary information and the calculator will give you a clear picture of the premiums which you ought to pay.

Given the reasons above and its easy availability, the term insurance policy has become popular. However, before you buy the policy it is important that you understand its features and benefits. After having analysed this, select the one which best suits your requirement.  You can also seek professional guidance to pick the right policy for you.