How Is a Term Insurance Policy Beneficial?

Term Insurance policies are low-cost and flexible insurance plans that provide financial protection to your family along with tax benefits when you are not around. With Term Insurance, you can determine how long you need coverage, and then purchase the coverage you need for that time frame, at an affordable price. Not only does it provide protection to your family in the most unfortunate events but also provides you tax benefits.

What is a Term Insurance Policy?

A term insurance policy is a contract you sign with an insurance company. Generally, these types of policies are for a set duration, which is commonly 10 to 20 years. Some insurance providers, like Edelweiss Tokio Life, offer term insurance plans like Total Protect Plus, which provide life cover for 100 years. Term insurance companies typically require you to pay a premium every month. The amount of the premium depends on a number of factors like age, gender, general health, life expectancy, the extent of coverage you desire, and the type of company you choose.

Term Insurance is all about providing you with the amount of coverage you need to protect your family financially. When looking for a term policy, it’s important to think about what your needs are going to be for the term of the policy.  Terms can range from six months to hundred years and vary based on what coverage you are looking for. The shorter the period, the less likely it is that there will be any lapses in coverage and the more affordable it will be. When looking for a term policy, be sure to consider which types of coverage you want and how long you want them to last. It’s also important to consider your age as well as future health issues that may or may not occur during that time.

What are the Benefits of Term Insurance?

Many term insurance plans come with riders that can be added on to customize the plan to meet your specific needs. These riders can help you save on your premiums, provide additional coverage, or reduce your monthly payment. When purchasing term insurance, keep the following in mind,

  • the type of coverage that suits you or your family’s needs?
  • how much coverage do you need?
  • how long do you need the coverage?
  • if your term insurance provides coverage in unforeseen situations?

Term insurance is flexible and affordable because the premiums are fixed for the term, or period, you choose. The cost of insurance stays the same throughout the term, so you don’t have to worry about how much it will cost every year. Term insurance plans like Edelweiss Tokio Life Zindagi Plus offer several unique and valuable benefits, including:

Higher sum assured through affordable premiums

The amount you can receive through a term insurance policy is known as the “sum assured”. This is the maximum amount the insurer guarantees you will receive in the event of an unforeseen incident. The higher the sum assured, the better off your family will be. A great advantage of term insurance plans is the affordability they offer in terms of premiums. In fact, when you opt for a term insurance plan like Edelweiss Tokio Life’s Zindagi Plus plan, you get discounts on your premiums when choosing a higher sum assured value.

Option to customize your plan through riders

Many term insurance plans come with riders that can be added on to customize the plan to meet your specific needs. These types of riders can help you save on your premiums, provide additional coverage, or reduce your monthly payment.

For example, one popular rider is the Waiver of Premium rider, offered by plans like the Edelweiss Tokio Life Total Protect Plus. In case you are diagnosed with a critical illness, suffer from total and permanent disability due to an accident or face a more unfortunate situation, this rider comes to your aid.  This is done by waiving off all remaining future premium payments, leaving your plan benefits intact. Other riders offered by this plan include Accidental Death Benefit Rider, Accidental Total and Permanent Disability Rider, Critical Illness Rider and Hospital Cash Benefit Rider.

Multiple premium payment options

Some term insurance plans allow you to choose how you want to make your premium payments. For example, if you purchase the Edelweiss Tokio Life Saral Jeevan Bima Plan, you can opt for premium payments at a monthly, half-yearly, or yearly frequency. You also have the option of limited pay, where you complete your premium payments within 5 or 10 years, so you can relax sooner and enjoy the benefits of your plan.

Tax benefits

When you buy term insurance, you avail of income tax benefits under Section 80C and Section 10 (10D) of the Income Tax Act, 1961. Under Section 80C, you can avail of a deduction up to Rs.1.5 lakh per annum for the term insurance premium paid. Other than this, the benefits you receive are fully exempt from taxes under Section 10 (10D) of the Income Tax Act, 1961.

The Bottom Line

The long-term financial benefits of term insurance cannot be overstated enough. Term insurance is an affordable way to provide your family with protection in case you become too sick or injured to work. You can purchase term insurance for a specific period of time, and then cancel the policy once that period ends. You should always speak with your financial advisor before purchasing term coverage to ensure it’s the right fit for you and your family. You can consult with a financial expert at companies like Edelweiss Tokio Life and understand which plan best suits your needs. You can also purchase your plan online on the company website.

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