Best Term Insurance Plan
What to Expect from Term Insurance in India
Term insurance is a form of life insurance that expires after a designated period of time. These plans have gained immense popularity in India owing to the fact that they secure your family’s financial future with much lower premium payments than whole life insurance.
Why Choose a Term Plan to Secure the Future of Your Loved Ones
If you are the primary breadwinner in your family or even one of the income generators, you would want to ensure that your loved ones have the funds to fulfill their needs and even accomplish their dreams, even after your demise. There are several other advantages of choosing a term plan, including:
- Stability: Your money that you pay as premiums is not put into any risky investments.
- Tax benefits: Term insurance in India allows you the same tax benefits as other life insurance policies. Under Section 80C of the Income Tax Act 1961, a sum of up to Rs. 1 lakh is deductable from your taxable income.
- High flexibility: Good insurers offer various customization options. You may choose a term plan in which the insurance cover rises every year to combat the impact of inflation. Some term insurance policies allow you to opt out of making payments for the entire term. You can choose a term plan that staggers the claim amount over a period of time, if your nominees are young or would not be able to manage the investment of the claim amount.
What to Consider When Opting for Term Insurance in India
There are two main decisions one needs to take for choosing an apt Best Term Insurance Plan:
- The amount of cover: The cover should be sufficient for your family to meet its basic needs, fulfill certain goals (like education and marriage) and pay off any liabilities that you may have incurred (like auto loans). However, too large a cover would mean excessive premium payments that would restrict your current lifestyle.
- Duration of the term plan: If you are in your 20s, you may want to opt for the maximum duration. This is because you would not want the policy to expire when you are middle-aged and would then need to take another life insurance policy at a much higher premium. However, if you are in your 40s, even a 20 year plan may be sufficient. Experts believe that the tenure of the policy should extend to cover a person till he retires.
It is a good idea to buy the term plan online, for its convenience and minimum hassle in documentation.