Life and death are not in our hands. Everything is pre-destined. Life insurance is a way to make our life safe and secure. This is for the benefit of ourselves and our loved ones too. There is also another good thing about these plans which comes up with term life insurance policies. They can have benefits during our life and even after that.
One by one we will know about how term life insurance is beneficial and why do we need this?
It is of utmost importance to know about saving and expenditure on a monthly and yearly basis. This can give you a vivid image of the major happenings in your life. This will further help you get an idea of how much insurance do you need.
What is a term insurance plan?
Term life insurance is nothing but one of the most powerful and cost-effective forms of life insurance. It protects the family and the owner in many ways. It is in other words financial protection to the beneficiary if in the worst case, the holder dies.
The major advantage of the term life insurance is that anyone can purchase it at a meager premium. No one ever wishes to pay a high premium; therefore term life insurance will be the best one for all.
The premium for term life insurance plans can be paid on a monthly, quarterly, or yearly basis. The premium amount depends on several factors, the major one being the mode of payment. The earlier we take the life insurance plan or the term plan, the less premium amount will be there.
Why do we need term life insurance?
Here are a few reasons to go for term life insurance:
#1: The low premium
Life insurance plan, probably everyone thinks of buying it. The other factor before buying the plan is the premium. It is always good to have a low premium with maximum benefits. It is only the term plan and no other plans which provide you with low premiums.
Read Also: 8 Ways to curb down your Life Insurance costs
The normal calculation is such that any individual will have to pay only one percent of his or her annual income to purchase any term insurance plan. So, one of the reasons for purchasing a term insurance plan is its low premium.
#2: The dependency of your family members on you
The family members can comprise of your wife, children, mother, and father. If your entire family depends on you, it is the best thing to go with the term insurance plan.
The prime reason for it is your child’s education. There are several responsibilities in life and meeting all of them is practically impossible, but some of them are made feasible by helping with financial assets. The family becomes secure with the purchase of a term plan.
#3: Protects your assets
It is obvious to purchase a house with a loan. Some take huge amounts of loans whereas others have a small one. Many also take a car loan. To make your loans and other assets secure, term life insurance is very important.
In case of your sudden demise, your family might be burdened with EMI payments. Purchasing a term life insurance can finish this problem.
#4: Protection against critical illness
Due to various lifestyle changes and low immunity, people fall sick too often. Chronic and critical diseases are also becoming common. To stand against all kinds of critical diseases, a term insurance plan is necessary.
Unfortunately, if the policyholder dies, the benefits are passed on to the nominee.
#5: Flexibility in all modes
One of the major advantages of buying term insurance is flexibility. Once you buy the plan, you can pay the premiums in any mode you wish to. Due to the advancement of the digital payment mode, this can be the most convenient way.
You can change the plan and even modify/customize it as per your choice whenever necessary.
#6: No brokerage
Typically if you go for the digital payment mode then there will be no brokerage and administrative fees for the term insurance plans. Thus it has been one of the most common reasons why people buy term plans.
Another way of avoiding any kind of administrative fee is by paying the premium every year. This helps save the money every month. And then you can payout at the year-end. On the other hand, if you pay the premiums every month, you need to pay the administrative fees as well each time you pay the premium.
#7: Tax benefits
If you are struggling to get the tax benefits then it is recommended to go with the term insurance plans. It will help you save a lot on the tax side. Tax deductions depend upon the state where you are living and thus waving off the taxes depends on it too.
#8: Fixed premium
A benefit that is usually not available with any other life insurance plan is that you will have to pay fixed premiums for the term plans. Once you buy the term plan and fix the premium according to your budget, it will remain fixed until maturity.
#9: Beneficial if you start early
The premium will be comparatively lower if you start the term plans at an early age because the premiums also depend upon the age at which you are buying.
#10: Longer life cover
The term insurance plans can be bought for a longer tenure. It is not that if you are retiring at the age of 60 then term plans can also be taken until that age only.
Read Also: 6 Ways to Measure How Much Life Insurance Do You Need?
Several companies provide a total tenure of 70 years and some up to 75 years of age.
Conclusion
The term life insurance plan is as necessary as a glass of water in your daily life. By buying it, you are not only securing your life but the life and happiness of your dependants too. As the awareness of buying the term is spreading, the plan has become quite prominent and the premiums attached to it are comparatively lower as compared to the benefits attached to it. Go for a term plan and enjoy some peace of mind!
