Before we understand why it is important for one to have Term Insurance, let’s understand what is a Term Insurance.
In financial terms it means a type of life insurance policy that provides coverage for a certain period of time or a specified term of years. Unlike other permanent life insurance, Term Insurance is comparatively less expensive. Term Insurance carries no cash value that is in other terms means the only value is the guaranteed death benefit from the policy.
Now let’s get a look on how it is important for one to have a Term Insurance.
We all know that family plays an important role in our everyday life. Each and every effort we do are for building a good lifestyle and a stable future for our family. It becomes important for one to have financial security for the family in case of any mishappenings.
Term Insurance has over the years gained popularity for being the most unambiguous product. Here are few reasons where it can be seen that people opt for a Term Insurance in their life:
- Provides Large Cover
Term plan provides a larger life cover than any of the other types of insurance plan for the same premium. Therefore, it becomes easy for the whole family to take term insurance with the adequate life cover for their loved ones. Apart from the cover, premium is also charged at a reasonable amount.
Term Insurance is much easier to understand from the other insurance plans which covers a huge amount saving with risks. It is not easy to pay a premium which is risk cover cost and amount paid is invested as savings. But term insurance is the essence of simplicity as it insures the one to pay the premium amount and get the term accordingly insured by them.
- Tax Benefit
Tax saving is one of the parts of safe investment as the premium paid towards term insurance ensures investment at a very low cost. When you purchase a term plan, you may get tax benefits as applicable under section 80C and section 10(10D), thus helping you to save on tax.
- Provides Financial Security
If you are the only person earning for your family, then more than ever it becomes important to buy a term plan as you might have other obligations such as housing loan, car loan and any other. Thus, in case of any unforeseen event, term plans help to cover the risk of repaying the loan.