Term Insurance is the purest and simplest form of life insurance that helps you financially protect your family for a set time period in return for fixed premiums.
What is Term Insurance?
Term Insurance is the most affordable form of life insurance, offering financial protection for a set period, or “term.” If the policyholder passes away during this period, the plan provides a death benefit to the nominee or beneficiary. For example, a healthy 30-year-old non-smoker can purchase a 1 Crore term insurance plan for his family, covering them for the next 20 years. The premiums for this coverage start at just ₹725 per month. This means that with a 1 Crore cover, his family can continue their current lifestyle without financial strain in case of his untimely death.
Note: The premium differs based on the type of premium payment option opted by the policy buyer.
How Term Insurance Works?
Let us understand how term insurance works with the help of an example:
Meet Suresh
Suresh, a Healthy and non smoking male.
Bought Policy
Suresh bought a ₹ 1 crore Term Insurance for a 25 yrs policy term to secure his wife financially.
Unfortunate Death
In the 9th Policy year, Suresh suffered an unfortunate death.
Claim
His wife received a ₹1 Crore death benefit from the insurer.
After Claim
His wife can use the benefit & maintain her current quality of life.
Why Should You Buy Term Insurance Plan
Long Term Coverage
You can choose long term coverage till 99/100 years to leave a legacy for your loved ones at a term plan premium you can afford. This long term cover benefit is one of the important factors that you need to check when looking for the best term insurance plan.
1 crore term plan @485/month
Term life insurance plan is the most budget-friendly type of life insurance and offers a large amount of life coverage at an affordable premium rate. This life cover can help take care of financial obligations and liabilities.
Income Replacement for Family
In case, you are the main breadwinner of your family, or if your loved ones mainly depend on your income, your family may be left financially vulnerable in your absence. In such cases, an income replacement plan like the ABSLI Income Suraksha plan can help replace your income and provide monthly income for your family.
Protection from Critical Illnesses
Various term plans provide critical illness benefits to help you get good treatment for life-threatening diseases/ailments without worrying about the hospital bills. You can easily avail of critical illness cover for diseases mentioned under the plan by buying a critical illness rider with a term plan.
Coverage against Disability
Accidents can occur anytime, anywhere, and may lead to permanent or temporary disability. Disability coverage with a term policy will provide financial support to your family in case of accidental disability. This can be availed by paying additional term life insurance premiums.
Survival Benefits
A pure term insurance plan does not provide any survival benefits if you outlive the policy term. However, a TROP plan provides you with a lump-sum payment after the policy ends to help you achieve varied financial objectives. The returned amount is almost equivalent to the total amount of premium paid.
Multiple Premium Payment Options
Term plan offer you the flexibility to choose the premium payment term. You can either choose regular payment through the policy term or the limited pay option.
Tax Benefits
A term insurance plan offers tax savings benefits up to Rs. 1.5 Lacs on the term plan premium amount paid under section 80C of the Income Tax Act, 1961. The death benefit paid under this plan is exempted from taxes under section 10(10D).
Financial Protection for the Family
As the sole breadwinner of your family, it falls on your shoulders to look after the well-being of your spouse, parents, and children. Buying a pure term insurance plan is important to make sure that you fulfil your responsibilities to your loved ones, even in your absence.
FAQs About Term Insurance Plans
What does term life insurance do?
Ans. Term plans is a life insurance plan which offers financial protection to the policyholder for a specified time. In case of unforeseen death of the insured during the policy term, the insurance provider pays the death benefit to the beneficiary.
What are the 3 benefits of term insurance?
Ans. A pure term insurance plan offers financial protection for the family in case of the untimely policyholders death. And you can also get optional coverage for accidental death or critical illnesses. Term plans also cover you for long term at low premium rates.
