Why term insurance for working professionals is a must-have?
Life is full of aspirations and goals that we want to achieve. It is indeed precious and at the same time, unpredictable. And due to such unprecedented circumstances, our objectives and dreams of our family might remain unfulfilled. Covid-19 is the most appropriate example which suggests that there is no timeline for challenging times. Such circumstances can knock our door anytime, and thus, we need to be prepared with a back-up plan.
Considering today’s working environment when the pandemic has hit hard across all industries, the importance of term insurance for working professionals cannot be ignored, especially for working professionals.
But why term insurance for working professionals is considered so important?
With time our responsibilities and liabilities also grow, such as spouse, children, and parents. Therefore, in our absence, they should be secured at least financially so that they can lead their life comfortably while managing their daily needs and fulfilling their dreams as well. Term insurance provides a substantial amount as a death benefit to the family members of the deceased policyholder, which can help them in filling their financial gap. Other significant expenses like children education, marriage expenditure and more also get handled with the sum assured amount of the term plan.
Takes care of the loans and liabilities:
Due to the ease of availability of loans or credit facility for almost everything, we usually materialise all our goals early in life. However, in case of uncertainties and our absence, these loans and liabilities could be a massive burden on our family. This is where term insurance plays a crucial role and rescue them. The unpaid or outstanding debts can be easily paid off with the death benefit amount which the nominee receive after the demise of the policyholder.
Term life insurance is the most affordable as compared to all other forms of life insurance plans. Due to which you can assure family’s security without compromising on regular expenses and occasional spends. Term plans offer comprehensive insurance coverage at affordable premiums which does not hurt our pockets. In addition, it also provides the flexibility to add riders like critical illness, accidental benefit etc. which further extends the base coverage of the policy.
Term insurance offers two specific tax benefits under the Income Tax Act, 1961 which are Section 80C – Under this section, the premiums paid towards the insurance coverage are eligible for tax deductions up to Rs 1.5 lakhs. They can be claimed as an exemption from the total income while calculating tax. However, after budget 2020, this provision is only accessible for those who select the old tax regime.
Section 10 (10D): Under this section, the insurance coverage amount or the sum assured that the nominee of the policy gets after the demise of the policyholder or the maturity benefit amount in case of Return of Premium, is eligible for tax benefit.
Traditional term plans are pure protection plans which only offers a death benefit. But with the change in preferences and thought process, some term insurance policies provide maturity benefit in the form of the return of premiums. Wherein, if the insured person survives the tenure of the plan, then he or she gets back all the premiums paid after the maturity of the policy.
Knowing the benefits and features of various term plans is necessary but choosing the right term plan is also essential. Therefore, it is imperative that we know about our needs and requirements such as we should opt for a sum assured by evaluating family’s expenses and the amount required to fulfil their dreams. It is also equally important to look for other factors like customer support, ease of service, competitive rates, claim settlement ratio, availability of riders, terms and condition of the policy along with the credibility of the insurance company.
Overall, term insurance is a necessary product for every individual and term insurance for working professionals is a must. It should be included in financial planning as well as to ensure the family’s financial security. However, we need to make sure that we are well aware of our needs and about the chosen term insurance plan to make a wise buying decision. Hence, buy term insurance plan before it’s too late. For further assistance from insurance experts, you can visit BimaKaro.in and get quotes on various term plans based on your requirements.