Term insurance plans are particularly designed in a way to provided financial protection to the family against unforeseen circumstances. The life insurance plans are generally known as a protection plan. While life insurance plans offer a wide variety of options to the buyers, on the other hand, a term insurance plan offers life coverage with no saving a profit component. Term insurance plans are best for those insurance buyers who just want to have a life cover without any savings. Moreover, these plans are one of the most affordable plans and can be availed easily in a hassle freeway. Besides this, to validate the point that why one should have term insurance plans, here we have discussed briefly some of the benefits of term insurance plans.
Term Insurance are Simple in Nature
As compared to any other insurance plans, term insurance plans are very simple to understand. The plans that provide life coverage and has saving component is known as cash value plans. On the other hand, term insurance plans work on the simple concept. In this, the insured simply has to pay the premium in order to get life coverage. A pure term insurance plans do not include any maturity benefits, it only offers death benefits. In early years of term insurance plan, the premium amount is usually lower as compared to the cash value insurance.
Term insurance plans are not only simple to understand. Moreover, it can be easily compared to other plans on the basis of pricing. The term insurance plans offer a comprehensive coverage at affordable pricing. Due to this advantage, the term plans are increasingly becoming a commodity. The term insurance plans can be purchased to meet the specific financial obligations, such as repayment of loans, etc.
Opting out a term insurance policy is much easier than getting a life insurance plans. In term plans, the policy comes to termination if the insured stops paying the premium. Moreover, the term life insurance plans can be converted and renewed easily. For a long run according to the choice of the insured, he/she can convert a term plan into an endowment plan with an associated increase in premium amount. In case if your insurance need changes than many term policies can be converted to cash value life insurance.
One of the best advantages of term insurance plans is that you can avail tax benefits under section 80C and 10D of income tax act. The premium paid is also exempt of tax deduction under different sections of income tax act.
Apart from all these benefits, term insurance plans are also suitable for a low-income person who wants a larger cover in order to protect his family by providing financial stability in case of his demise. Term insurance plans are most suitable for the sole breadwinner of the family or a person with moderate income.
In case if you have taken a large loan like a home loan or car loan. Then buying a term insurance plan is beneficial, as you can cover the risk by repaying all the loans with the help of term insurance plan which is cheaper as compared to the other types of insurance plans. In case of uncertain demise of the insured person, the plan not only provides a death benefit to the nominee of the policy. Additionally, it can also be used to cover the risk of business loss due to the untimely death of the policy holder.
With all these benefits offered by term insurance plans, it is certainly one of the most beneficial plans as compared to other insurance plans. Having a term insurance plans is the best way to provide financial security to your loved ones in a very affordable way.Source: MY Insurance Bazaar