6 Things you Didn't Know About Term Insurance

A lot of us put off thinking about life insurance until it's too late. We deceive ourselves into thinking we can't afford it, are too young, or are too healthy to buy life insurance. Truth be told, none of us is impervious, so we owe it to our loved ones to make arrangements for their financial stability in the case of uncertainty. 

Term insurance can help with that. It is a sort of life insurance that offers protection for a fixed tenure, usually 10, 20, or 30 years. It is a straightforward and reasonable method to safeguard the financial future of your family.

Covering the Basics:

Let us begin with the fundamentals. Term insurance offers protection for a predetermined time or term. If the insured passes away during that time, the insurance pays a sum or death benefit to the beneficiaries. The insured determines the scope of coverage and the duration of the term, and premiums are normally paid on a monthly or annual basis. 

Term insurance has no monetary value or equity, in contrast to permanent life insurance, such as whole or universal life insurance. The coverage expires once the term is completed, and if the insured dies after the term has passed, there will be no compensation. 

6 Things You Didn't Know About Term Insurance

Let us discuss certain things not widely known about term insurance. 

1. Affordable Premiums

Did you know that the costs of term insurance are often substantially lower than those of permanent life insurance? This is so because there is no monetary value or equity attached to this policy, which simply offers coverage for a specific amount of time. The insurance provider might provide lower premiums as a result. Hence, it is a great option for people and families who need life insurance coverage but may not have a lot of additional cash available.

2. Customizable coverage

Did you know that you may customize your term insurance coverage to meet your specific needs? You may pick the level of protection you require as well as the term's duration. In order to further personalize your coverage, you can add riders to your policy. You might want to include a rider for accidental death or a waiver of premium. These features enable you to design a plan that is exactly suited to your requirements.

3. Convertibility Options

You can change your policy's conversion option to permanent life insurance. This can be a great feature for people who originally bought it due to its affordability but later decide they desire the extra advantages of a permanent life insurance policy.

4. Renewable Coverage

Several term insurance policies offer renewable coverage. When your policy's term expires, you can renew it without going through another medical exam or providing any extra health information. If you still require life insurance coverage but have health difficulties that may have arisen during the term, this is a great alternative for you.

5. Multiple Beneficiaries

Did you realize that you can designate several beneficiaries for term insurance? For those who wish to make sure that their possessions are dispersed evenly among their loved ones, this might be extremely crucial. You have the option to designate as many beneficiaries as you like and decide how the death benefit is distributed among them.

6. Term Insurance Tax Benefit

Term insurance tax benefit has been introduced by the 80C of the Income Tax Act of 1961, which permits tax deductions for term insurance premium payments. This entails that you can deduct up to Rs. 1.5 lakhs from your taxable income, which can save you a sizable amount of money on taxes. Additionally, Section 10(10D) of the Income Tax Act exempts the death benefit from taxes when it is given to the nominee in the event that the policyholder dies. Utilizing term insurance tax benefit is a great method to give your loved ones financial stability while also saving on taxes because the entire sum assured is payable to the nominee without any reduction of taxes.

Conclusion:

To sum up, term insurance is a fantastic choice for people and families that wish to safeguard their financial future. It is a straightforward and efficient way to make sure that your loved ones are taken care of in the instance of your death because of its price, customization possibilities, and flexibility. It offers a variety of advantages, starting from the low premiums to the option to choosing several beneficiaries. 

Hence, if you are thinking about getting life insurance, consider term insurance as well. No matter what the future holds, you can rest easy knowing that your loved ones are secured with the correct coverage.