Investing in a term insurance plan is one of the most important ways an insured can choose to secure their future and that of those who depend on it. Investments and insurance plans can be tedious and financially stressful to maintain in their own way, in times of inflation and recurring increases in lifestyle costs; premiums in this regard may be ill-suited to a person’s insurance needs or income capabilities.
Therefore, the most imperative step is to create a smart investment solution that enables an insured to meet their financial goals and coverage needs. A term insurance plan can be a useful method to secure these solutions. Let’s understand the fundamentals and characteristics of a term insurance plan.
Courtesy Image: Shutterstock
So, what is term insurance? Well, a term life insurance policy is designed to effectively cover the needs of the insured and their dependents with an insured death benefit in the event of the death of the insured. A basic term insurance plan in India is considered one of the most affordable ways to secure your future when premiums are low and you can customize your coverage, add endorsements and choose payment models. according to their needs.
A term insurance plan is also an asset, which can help secure or repay long-term loans, even in the absence of the primary breadwinner. It is a resource to be used when unavoidable financial expenses must be borne by the surviving beneficiaries in the absence of the policyholder.
Find the perfect term insurance
Finding a term insurance plan that can meet your investment needs is a requirement that many investors are actively pursuing today. This is a bonus in many ways because an insured can avail his insurance coverage, benefits while getting some money from the scheme. While term plans are primarily intended for beneficiaries of the insured to receive an insured sum upon their death, a provision for the return of premiums can also be used.
Since standard term insurance policies do not provide any maturity benefit in the event that the insured survives the term of the policy, one can opt for a term plan which has the option of repaying the full amount of the policy. the premium invested by the insured at the end of the term if they survive.
Return of premiums, when coupled with the benefits of a maturity guarantee, makes the insurance policy a big and smart return on investment, which is complete with all insurance coverages. Life coverage that protects the insured for the duration of the policy and the monetary benefit they receive at the end of the policy becomes an end-to-end solution to an investor’s financial needs.
Therefore, one should consciously consider a term insurance plan when also looking to get returns on their investments, as this can help with financial planning and coverage for a person’s foreseeable future.
Characteristics of the term insurance plan
Now that the investment-oriented benefits of a term insurance plan have been established, let’s take a closer look at the main features of a term insurance policy.
- Low premiums: There is a range of insurance plans that provide coverage and future benefits to policyholders of all kinds. However, the more complex a plan, the higher the premiums. Therefore, those who are starting their professional careers, with limited knowledge of financial agency and insurance, may choose to opt for a term insurance plan as their first investment.
Courtesy Image: Shutterstock
It’s a simple instrument that has bonuses that can go as low as Rs 600 per month, and are accessible to people of all income brackets.
- Death benefit : This is the promised payment amount promised to the beneficiary of the contract in the event of the death of the insured. This amount is generally a financial resource allowing the beneficiary to maintain his financial obligations after a disruption in income patterns.
- Advantages of the rider: Income, waived premiums, disability, accidental death or even critical illness riders can be added to their existing term insurance plan. The cost of these riders added to the base cost of the premium; it is therefore necessary to choose after adequate deliberation.
- Fiscal advantages: The premiums paid for a term insurance plan and the sum of payment thus received from it at the time of maturity are exempt from tax under sections 80C and 10 (10D) of the Income Tax Act. income, 1961.
- Value released: The total amount paid to the insured or his beneficiary at maturity is limited to the paid-up value. The paid-up value corresponds to the calculated premiums paid by the policyholder on the stipulated premiums to be paid by the insured when the policy is taken out.
- Redemption value: The surrender value is the amount to be paid by the insurer to the insured in the event that the latter decides to terminate the value before maturity.
The pursuit of identifying the best term insurance plan and researching its investment bonuses can be completed by weighing its needs against the features and benefits offered by it. In order to further explore the term insurance options with the return of premiums available, one can check out the plans offered by Max Life Insurance which offer a mix of these benefits along with close advice from their knowledgeable financial advisers.
(Devdiscourse journalists were not involved in the production of this article. The facts and opinions appearing in the article do not reflect the views of Devdiscourse and Devdiscourse assumes no responsibility in this regard.)