Term insurance plan was introduced in India in the year 2009 andhas been developing since then. The straightforward terms, profitability, and flexibility of this plan have made this plan so popular across the country. Today, all the renowned insurance providers are offering term life insurance with various distinctive features. Here we are discussing the reasons behind the growth of this plan in the country.
More Death Benefit In Lower Premium
Term insurance enables an individual to gain more death benefits at a lower premium. Considering that there is no cash value in this plan, the premium covers the overall cost of the insurance. Therefore, people can acquire a substantial amount of coverage at comparatively lower prices. Additionally, if you take out a term insurance plan at a younger age, you can enjoy lower premiums remaining fixed throughout the tenure period.
Easy to Understand
Another reason why people rely on term insurance plans is that it is quite straightforward. Although there are terms and conditions, they are quite simple to understand. Term life insurance is referred to as a pure life cover that centers on providing beneficiaries with an assured sum in case the individual insured dies.
A Wide Range Of Tax Benefits
Although the primary reason to invest in term insurance is to secure the family’s future, there are also some notable tax benefits. With the best term plan, you will get the following tax benefits:
- Section 80D - When the premium is paid towards the health-associated coverage such as critical illness riders. People can claim the tax deduction up to Rs. 25,000 for the premium that they have paid towards the plan.
- Section 80C - In this section, insured individuals can claim a tax deduction of up to Rs. 1.5 lakh for specific purchases and investments, including the premium that they have paid towards the term insurance plan.
- Section 10 (10D)- With regards to term life insurance, insurers can claim this benefit when claiming the pay-out. The entire amount is entirely exempt from the taxes.
Tons of Rider Options
Riders in insurance policies can allow people to get additional benefits. In term insurance plan, one gets a wide range of rider options that include -
- Accidental Death Benefit Rider
In this, if the insured individual dies due to an accident, then the policy pays out additional money as rider benefit. The percentage of this sum is based on the primary insured sum and may differ from one provider to another.
- Accelerated Death Benefit Rider
In this type of rider, the family of the person with a terminal illness gets a percentage of the assured sum before the policy expires. This helps in taking care of the expenses.
- Waiver of Premium Rider
It assures that if the insured individual is not able to pay premiums due to any disability or loss of income, the premiums pending in the future are waived off.
People have been increasingly investing in term life insurance. And the above reasons clearly states why people prefer it over other forms of insurance policies.
Author Bio
Chetan Sharma is a blogger and digital marketer by profession. He handles a network of multiple websites like news24bg & various others. He helps clients all over the world to achieve digital success.
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