Term Insurance is one of the most crucial components of a comprehensive financial strategy, especially for individuals with dependents. These plans provide a high coverage amount at a relatively low premium, ensuring financial security for your loved ones in the event of your untimely demise.
Let’s look at some of the reasons why term insurance policies are important.
Financial Security for Dependents
The primary reason why term insurance is essential is that it offers financial protection to your dependents. In the unfortunate event of the policyholder’s death, the sum assured from a term insurance plan ensures the family can maintain their standard of living and meet critical financial obligations.
Term insurance plans are known for their cost-effectiveness when compared to other types of life insurance. They offer substantial coverage amounts at low premium costs, making them accessible to a wide range of individuals. This feature makes it accessible to even those with limited financial means, so they can secure their family’s future.
Term Insurance Tax Benefits
One of the significant advantages of term insurance plans is the tax benefits they offer. Premiums paid towards term insurance are eligible for deductions under Section 80C of the Income Tax Act, 1961, up to a limit of INR 1.5 lakh per annum. Additionally, the death benefit received by the beneficiaries is tax-free under Section 10(10D).
Term insurance plans offer flexibility in terms of policy tenure and sum assured. Additionally, you may also be able to add riders to the plan to enhance the scope.
Understanding why a term plan is important is crucial for anyone looking to secure their family’s future. When looking to buy a new policy, using a term insurance calculator can simplify the process of selecting the right term plan. These calculators help you estimate the premium based on your age, coverage amount, policy term, and other factors.
Disclaimer:
Tax exemptions are as per applicable tax laws from time to time. Bonus rate may vary from time to time based on Company’s Investment Performance.
The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. IndiaFirst Life Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and IndiaFirst Life and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.
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IndiaFirst Life Insurance Company Limited, IRDAI Regn No.143, CIN: U66010MH2008PLC183679, Address: 12th & 13th floor, North Tower, Building 4, Nesco IT Park, Nesco Centre, Western Express Highway, Goregaon (East), Mumbai – 400 063. Toll free No – 18002098700. Email id: customer.first@indiafirstlife.com, Website: www.indiafirstlife.com. Fax No.: +912268570600. IndiaFirst Life Insurance Company Limited is only the name of the Life Insurance Company and does not in any way indicate the quality of the contract, its future prospects, or returns. For more details on risk factors and terms and conditions, please read the sales brochure carefully before concluding the sale. Trade logo displayed above belongs to our promoter M/s Bank of Baroda and is used by IndiaFirst Life Insurance Co. Ltd under License.
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