Insurance is an agreement between two parties in which one party assures to safeguard the risk and interests of the other party. It also assures payment of a certain amount upon happening of an uncertain event to compensate the party for the loss so incurred. The party that insures the risk is known as insurer which is a company so it is also called an insurance company. The other party whose risk is covered is known as the insured. Insurance policies allow people to carry their work, operations without fearing the risk of loss or damage. With growing exposure to risks, more and more people are readily taking up insurance policies.
In the case of the term life insurance, the beneficiary/insured is provided with the death benefit only if the insured loses his/her life within a specified time period, as mentioned in the policy. After the maturity of the policy, if no uncertain event occurs within the specified time period, then the premium paid by the insured will not be paid back. It is one of the most affordable life insurance policies, with large cover at a low premium. In the case of the Term Plan with Return of Premium (TROP), the premium paid by the insured will be paid back after the maturity of the policy, if no uncertain event occurs.
The Term Life Insurance allows people to take care of their family even after their death. In case of the death of the chief earner, the lives of his dependent people will be shattered financially and emotionally. But this policy helps in supporting the family after death. The person can be free from stress about what will happen to their family after their death.
However COVID 19 has affected business and insurance sector but still there are various advantages of Term Insurance during Covid-19. Some of advantages are as follows:
- Affordable: The cost of term insurance is its unique feature. The main and biggest advantage of term life insurance is that the sum insured in the policy is large as compared to other plans and the premium of the policy is quite lower as compared to other plans. The insured does not need to pay a heavy amount as a premium to get a basic life cover. The premium can be paid monthly or yearly, as per your convenience.
- Takes into account the rising inflation: Other insurance plans provide the sum assured which sustains one’s current lifestyle, but the term plan also takes into account the inflation at the time of calculating sum assured. In other insurance plans, the insured has to pay more premium to get higher risk cover, but in case of a term plan, the insured can get a higher sum assured despite of rising cost.
- Best for youth: The term plan is ideal for the youngsters, who have started working and does not wish to delay the life insurance. Term plan covering large sum assured at a lower premium with flexible payment options makes it a perfect fit for the youth. If your family is dependent on you, then it becomes even more essential.
- The option of renewing the policy: You have an option to renew the existing policy which extends the benefits of the policy further till the end of the extended term.
- Option to add riders: Riders are the provisions in the insurance policy that modifies the basic insurance plan and provides additional coverage to the insured. Riders are added on after paying an additional cost.
The term insurance plan also offers riders that increase the coverage. Various riders available are Accidental death benefit rider which covers the risk of death by accident and the insured has no need to buy a separate policy that covers accident risks, health-related riders, surgical care riders, etc.
- Tax benefits: The term plan premium paid is allowed as a deduction in the Income Tax Act, under Section 80C. The maximum deduction allowed isRs. 1,50,000.
The death benefit paid to the family is exempted under Section 10 (10D) with no upper limit.
- Various plans available: Various plans are available in term life insurance and also with customization according to the customer’s need. Each plan provides unique benefits.
- Spousal cover: In this plan, the policyholder and the spouse get life cover.
- Term Plan with Return of Premium (TROP): In this term plan, if no claim has been made within the policy time period, the premium of the policy will be returned after its maturity.
- Varying payout options: The policyholder can opt for a payout as a monthly income i.e., monthly installments and as a lump sum i.e., all at once.
The policyholders can opt for any of the above plans according to their financial needs and their future goals.
- Easy to purchase: Buying a term insurance plan is very a very easy task. You can buy the plan online through the web portal of the insurance provider or you can also buy offline by calling the agent or visiting the branch of the insurance company.
All the above discussed are the advantages of opting term life insurance plan. They provide long term financial security to the family of the insured. The family’s financial security remains intact even after the death of the chief earner of the family. Money cannot replace the presence of the person, but it surely can help the family to overcome the uncertainties and can fulfill their financial needs. The cover in the term insurance plan also gets increased with the age, as more responsibilities are over your shoulder.
There are many frauds committed by people by offering fake insurance policies, you must be well aware of these types of persons as they can get your hard-earned money. You should read all the terms and conditions related to the policy written over it before accepting the insurance policy, as sometimes the claim also gets rejected if you do not abide by the terms and conditions of the insurance policy. The payment of the premium must be paid on-time to avoid cancellation of the policy. You should go through all the term life insurance plans and opt for the term insurance plan, which will help you as well as your family in the long run.