5 Reasons Why You Must Invest in a Term Life Insurance Policy

1. 5 Reasons Why You Must Invest in a Term Life InsurancePolicy Life insurance plans are designed to cover the risk of dying too early. While there are different types of life insurance policies which help you meet different financial goals, a term life insurance policy is the most basic form of life insurance which should not be avoided. A term insurance planis a life insurance plan which covers the risk of premature death. If the insured dies during the policy tenure, the policy pays the family a death benefit thereby giving them financialassistance. Experts stress on the need of a term insurance plan and if you are wondering why, here are five reasons why you should buy term life insurance– To provide financial security for your family The whole reason that you earn and save is to provide for your family. You and your family have certain financial goals like buying a house, child’s education, retirement planning, etc. for which you save over a long term period. However, in case of your premature demise, all these goals might go unrealised. Your family might also find it hard to meet their daily lifestyle expenses if you are the sole breadwinner of the family. However, when you buy term life insurance, you secure the financial future of your family. In case of your premature demise, the plan provides financial assistance to your family so that they can not only meet their day-to-day expenses, they can also meet their financial goals. To take care of yourliabilities Loans have become quite common to finance your needs. The repayment of these loans can become a problem if you die before paying them off. In such cases, the burden of repayment shifts to your family burdening them with your liabilities. When you buy term life insurance, your liabilities can be taken care of by the benefit paid under the policy. This prevents the loan burden from shifting on to your family and it frees themfinancially. To provide regular income for yourfamily Nowadays, term insurance plans are also being offered as monthly income plans. Under these plans, the death benefit is paid either in monthly instalments or in a combination of lump sum payment and monthly instalments. These monthly instalments help in replacing the income which your family loses in case of your premature demise. Thus, if you choose a monthly income term plan online, you can ensure a regular source of income for your family even when you are notaround. For taxbenefits Term insurance plans, besides providing financial security, also help in saving taxes. The premiums that you pay when you buy term plan online are allowed as a deduction from your taxable income. You can earn a deduction of up to INR 1.5 lakhs under Section 80C of the Income Tax Act,1961. Moreover, the benefit which is paid by the policy is also completely tax-free in nature. This tax exemption is provided by Section 10 (10D) of the Income Tax Act, 1961 and there is no limit on the amount of exemption which you can claim. Thus, the benefit which your family would receive in your absence would be tax-free giving them a higher corpus to meet their financialneeds.

2. 5. Peace ofmind Term insurance plans have very low premiums since they usually cover the risk of premature death only. As such, you can opt for a high sum assured which would sufficiently take care of your family’s financial needs when you buy term plan online. When you know that your family would be financially secured even in your absence you can have peace of mind. Thus, the term insurance policy not only provides financial security for your family, it also gives you peace of mind in the knowledge that your family would not suffer a financial strain in case of anemergency. These reasons make a term insurance policy a must. You should, therefore, invest in a term insurance plan so that your family does not suffer a financial loss in yourabsence.