Why should you include term life insurance in your financial planning?
Many of us have heard about term life insurance, but not much we know what exactly it is. Some say it is beneficial while others think it’s not. A term plan is essentially a kind of extra security which offers coverage to the policyholder for a specific tenure. In case of uncertainty or sudden demise of the insured during the policy term, the insurance coverage amount gets paid to the beneficiaries of the term plan. Term insurance not only provides peace to the mind due to financial security but also forms an integral part of our financial plan.
But why choose and buy term life insurance?
- Financial security: Term life insurance is a pure protection plan that offers financial security to the dependents of the policyholder in case of his or her sudden demise. The coverage amount takes care of the liabilities and financial needs of the applicant’s family. Implying that term life insurance is a crucial aspect to include in your financial planning to ensure a safer future for your family.
- Affordable premiums: The premiums paid towards term insurance is lower than other forms of life insurance policies as there is no maturity benefit. Also, term plans offer considerably higher life coverage against lower premiums. Hence, it can be said that the term insurance policy is an affordable yet effective option to consider while planning your budget.
- Flexibility: It is one of the significant factors that makes term life insurance a must buy. Because term insurance offers you the flexibility to select a policy based on your needs and customise the coverage, pay-out options, premium amount as per your convenience.
- Tax benefit: The premiums paid against the term plan coverage is eligible for tax benefit up to Rs 1.5 lakh under Section 80C of the Income Tax Act. This proves that term life insurance is also a good way to save money, along with providing financial security to your family.
Importance of Term Life Insurance to be included in the financial plan
The term financial planning refers to the process of achieving monetary goals by managing your finances. The budgetary plan incorporates the creation of wealth, financial security, making arrangements for specific expenses, retirement planning and above all, getting prepared for crises and emergencies. However, it is necessary to understand that in all of this where does term plan fits?
Well, the truth of the matter is, a term plan is mainly a key to a robust financial plan. As you age, the responsibilities also increase -you get married, have family, buy a house, education expenses and the arrangements for your retirement. To support all these milestones, having a term plan becomes critical.
Term life insurance is still a new concept for many people. Individuals don’t consider it until a significant occurrence in life makes them figure out what could befall their family and friends. While the primary goal of purchasing a term insurance plan is to protect oneself from startling conditions; however, these plans help you and your family to carry on with a secured life.
Moreover, the majority of us usually get confused about where and how much amount to invest, whether it is on real estate, stocks, bonds or in any other avenues. Term insurance is an equally significant venture, which is pocket-friendly and above all can be customised at various phases of an individual’s lifecycle.
When it is a good idea for you to purchase a term life insurance?
Experts advised that in case of term plan it is always better to invest it in at the early stage of your life. As earlier you start a term plan, the more benefits like low premium for high life cover you tend to enjoy.
Overall, for all the working people and especially when you are the sole breadwinner for your family, it’s crucial to put resources into a term plan. The prior you purchase the more advantage you receive in return. Without a doubt, you can’t afford to exclude term life insurance from your financial planning. It makes sure that your family or dependents do not face any money related problem in your absence and lead a peaceful life. To know more about term life insurance, you can visit BimaKaro.in and compare term life insurance online and get personalised quotes as per your requirements.