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Why Should You Start Your Insurance Journey with a Term Insurance Plan?

  6/5/23 11:35 AM

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  6/5/23 11:35 AM   |

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Life insurance, when bought early on in life, can provide you with a larger cover at a comparatively lower premium rate. But of the various types of life insurance plans, term insurance happens to be the simplest, especially when it comes to the nature of coverage and the claim process. Term plan premiums are also relatively cheaper. A term plan’s primary focus is to offer adequate financial security for the family if something unfortunate happens to the policyholder.

So, make sure you do not just pick the lowest premium term plan but choose one that best suits your financial requirements.

Term Insurance Benefits: Why term plans should be the first life insurance policy you buy 

1. Low term plan cost: With inflation at an all-time high and a great many day-to-day expenses, it becomes financially strenuous to set aside large sums of money that can be paid as an insurance premium each month. However, due to the absence of a saving component or an investment component in term plans, premiums of these policies are relatively lower.

2. Term life insurance coverage: While term insurance is a form of life insurance, it can double-up to perform the functions of a health insurance policy. Term plans can be modified by adding riders at an additional premium and thereby cover critical illnesses, accidental death and disability.

3. Fixed premium: Term plan premium is not linked to the market, thereby making term policies a safe and stable financial product. The premium amount at which you buy a term plan stays put and does not change with time.

4. Host of tax benefits: While the main reason to buy a life insurance policy is to provide your loved ones with financial security in your absence, term insurance brings with it a host of tax benefits. For instance, you can claim a deduction of up to ₹1.5 lakhs for the premium paid towards a term plan under Section 80C. You can also claim deductions up to ₹25000 under Section 80D for the premium paid towards additional riders that cover health-related issues. The entire payout on a term insurance policy is exempt from taxes, too, under Section 10 (10D).

5. Enhanced cover: Certain term insurance policies allow you to enhance your covers on achieving different milestones in life. This way, you can buy term insurance with a low cover and enhance it as you reach a certain stage of your life like marriage or parenthood.

6. Multiple payout options: Term plans have multiple payout options, i.e., instead of paying out one lump sum amount to the beneficiary on the policyholder’s death, online term plans also offer the flexibility to choose from smaller amounts at regular intervals or one lumpsum amount immediately after the policyholder’s death followed by regular income payments for a fixed duration.

7. Need for extensive life cover in a post-pandemic world: The COVID-19 pandemic has affirmed the position of life insurance in an individual’s financial plan. Basis all the reasons mentioned above, term life insurance plans are the most straightforward as well as affordable life cover that an individual can buy. So, in this post-pandemic world, wherein securing yourself and your family takes precedence, online term plans can be a good life insurance policy to buy.

Saral Jeevan Bima Plan by Edelweiss Life Insurance

While there is no dearth of term insurance plans available in the market, Edelweiss Term Insurance Saral Jeevan Bima Plan is a great option when wanting to provide comprehensive coverage to your family in your absence. You can customise the plan by choosing the following options:

1. Premium payment tenure: You can choose your policy tenure from a minimum of 5 years to a maximum of 40 years. Coverage under the plan is offered up to the age of 70.

2. Premium payment frequency: You can pay a single lumpsum premium, frequent regular premiums, or pay premiums for a limited number of years.

3. Purchase mode: The policy can be purchased online in a simple, hassle-free manner.

Features of Saral Jeevan Bima

1. Term plan benefits: In case of the sudden demise of the policyholder during the policy tenure, a death benefit (sum assured) is paid out to the nominee of the policy. However, no maturity benefit is offered on this policy since it is a pure term plan. 

2. Tax benefit: Premiums paid towards this policy are exempt from tax under Section 80C of the Income Tax Act of 1961.

3. Free look period: A free-look period of 15 days is available under this policy, during which the policyholder can review the terms and conditions of the policy. In case of any disagreement with the terms and conditions, the policyholder can demand a refund. This refund will be subject to deductions of expenses arising from stamp duty and medical tests of the proposer. A proportionate risk premium for the period of the cover will also be deducted.

Conclusion

A robust term policy with the right coverage amount can secure your loved ones’ future and guarantee a good lifestyle for them, even in your absence. Moreover, term plans are affordable, and they offer a host of tax benefits. Lastly, but most importantly, they bring you peace of mind. 

 

Siddhant Dubey - Writer & Photographer

Siddhant works as a freelance content writer who is interested in a wide range of spheres from photography and personal finance to cooking. He is also an aspiring photographer striving to showcase life around him through his vision. 

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