Due to the uncertainty resulting from the Coronavirus (COVID-19) pandemic, a life insurance plan has become an indispensable part of your investment portfolio. COVID-19 has been in India since almost a year, due to which the wedding season, though subdued, is here. As you prepare for this time with shopping lists, gifts, and sweets, the social distancing rules prevent large gatherings.
So, it will be an intelligent idea to give your loved ones a thoughtful gift in the form of a life insurance plan. Although a wedding may not seem the most suitable time to think about insurance, in the current situation, it is the right thing to financially protect your loved ones.
A term insurance plan is the best gift to give your dear ones this wedding season. Here are six reasons that make this policy important:
- Affordable way to provide financial security
Compared to traditional life insurance policies, a term plan is more cost-effective. It is a pure life cover and does not offer any survival benefits, which makes it less expensive. This allows you to procure a higher sum assured (SA), which is an excellent way to offer monetary stability to your family in your sudden absence.
- Long-term coverage
You must buy a term insurance policy when you are young, as you will be able to avail of a plan at an economical premium. This is because insurers will perceive you as a low-risk policyholder. Moreover, most insurers offer a fixed premium, which means the amount does not change for the entire duration of the term plan. Insurance companies offer term insurance for the long-term (often up to 99 years), which ensures your family members will not face any financial distress when you are not with them.
- Simple buying procedure
You can buy term insurance online directly through the insurer’s website. The entire process is fast and easy. You will have to provide basic information, such as name, age, address, income, health conditions, lifestyle, and the number of dependents to receive the quote. You can then submit the necessary documents online to complete the application procedure. Additionally, term plans are quite straightforward to understand, as there is no investment or other benefit offered. Insurance companies offer flexible premium payment options. You can pay it either monthly, quarterly, bi-annually, or annually as per your financial situation. Buying term insurance online also reduces the cost because insurance companies save the commission paid to agents. In addition, the administrative and other overhead charges are lower for online plans, which can save a huge amount during the entire policy duration.
- Comprehensive coverage
Life is uncertain, and an accident or critical ailment can leave you incapable to work. Insurance companies offer all-inclusive coverage through riders to protect you and your family from the loss of income in such circumstances. Some of these riders include critical illness, accidental permanent disability, and waiver of premium. You can add one or more of these riders depending on your and your family’s needs.
- Flexible tenure
Term insurance policies are available for various periods to meet the different requirements of individual buyers. You can choose the policy duration to fulfill particular objectives like the repayment of an outstanding home loan in your untimely absence or other similar requirements. This ensures that your family does not face any financial burden or severe consequences in case of an unfortunate event.
- Tax benefits
The term insurance premium is eligible for a tax exemption under the Income Tax Act, 1961. A premium of up to INR 1.5 lakh per year is tax-deductible under section 80C of the Act. Additionally, the policy benefits paid to your nominees are tax-free according to Section 10(10D) of the Act.
A term insurance policy may seem an unlikely gift during this wedding season. However, these plus points make it an excellent choice. Ensure that the renewal premium is paid on time so that the term insurance benefits continue for the entire period of the plan.
