Life insurance is not about investing in your money to earn a refund, it’s about financial protection for your loved ones. And the most effective way to do this is through a term insurance policy. This policy does not invest your money so you have to pay for insurance only and you will not return the money once the policy term is over. After death in the policy period, it pays a huge corpus to the nominees, which helps them to get out of any financial crisis and not get out of their live stream. A term plan is the only life policy you have, as it will give you a larger cover at a lower cost. Read on to find out more about term plans here.

However, remember that you will need appropriate attention in the end to buy a term plan while filling out an insurance policy form called a proposal form. To understand what determines your experience of buying a term insurance policy keep reading.

What Exactly is Term Plan Premium?

Term life insurance is a pure and inexpensive form of life insurance. This type of life insurance nominee provides financial protection if the policyholder dies during the policy period. Term insurance policies provide a high-life cost with low premiums. Example: ‘ Premium for 1 Cr term insurance cover ‘ 490 * * p.m. These fixed premiums can be paid for the entire policy period or for a limited period of time or in a regular period. The premium amount will vary according to the type of premium payment chosen by the buyer.

Why do you need term insurance?

Your family depends on you: The term insurance money can be used to meet your family’s monthly expenses and important goals such as your child’s education.
Your assets need protection: You can take loans for assets such as a house or a car. However, if something happens to you, your loved one needs to repay the loan. In such a case, the term insurance payment to your family can be used to pay the best loan.
Lifestyle hazards: Modern lifestyle problems lead to many diseases. Some term insurance plans do not protect your family after death, but also provide serious illnesses ^ protection during your lifetime. This symptom pays for the diagnosis of some serious ailments, such as cancer or heart attack.

Who should buy a term insurance policy?

Anyone with financial dependency should buy a term insurance policy. This includes married couples, parents, young professionals, SIP investors and, in some cases, retired ones as well.

Life insurance premiums paid will be reduced from taxable income under section 80 C and hence a double benefit to taxpayers – protection and tax saving. The payment (maturity value) obtained under the insurance policy is subject to conditions under section 10 (10 D) of the Income Tax Act 1961. Term insurance is one of the lowest premiums in a variety of insurance policies.

Therefore, people who have obtained any of the three main benefits associated with term insurance should consider buying such policies. The three main benefits are-life protection, tax-saving, and affordable premiums.

Parents are usually the only source of financial assistance to their children. Children’s needs are from school fees and living expenses to higher university fees, later in life. The death of parental unexpected will damage this future and lose children’s life chances. Parents should avoid this scenario by taking a term insurance policy. This policy pays a large sum and/or income to meet the expenses of their children, in the event of the death of parents (mortality).

New marriage:
Roses, chocolates, and film tickets are very good, but here is long-term gift-term insurance to your spouse. This gift gives more than a momentary pleasure to your spouse, which saves the future of their life. If the insured dies, married couples are required to buy as soon as possible to finance a term insurance life partner.

Young professionals:
Young professionals are starting their career. Many of them are not yet married and have no financial dependency. But it is possible that in the future they may become married or support their parents/relatives. You should buy term insurance now without waiting for such people. After buying the policy, premiums are the same for a person’s entire life. On the other hand, customers are forced to pay higher premiums because they are waiting to buy term insurance because term insurance premiums increase with age.

The term insurance premiums paid are allowed as an exception from taxable income under section 80 C of the Income Tax Act, 1961. The term insurance payments on maturity is deducted from tax subject to conditions under section 10 (10 D). Taxpayers can, therefore, use term insurance to significantly reduce their tax burden.

SIP Investors:
In mutual fund SIP (systematic investment plan) Investors invest a fixed amount in a mutual fund every month. Wealth creation in a SIP runs with normal installments flow which will be compounded over time. But the untimely death of an investor can stop the flow of installments. The SIP can be protected by providing funds to the insured’s nominee to continue the term insurance SIP.

Retired persons should have term insurance if they have their spouses or families. Buying term insurance is also a way of leaving a legacy to their families. For, term insurance will be paid to nominees on the death of the life insured. The term insurance payment is tax-free subject to conditions under section 10 (10 D) of the Income Tax Act, 1961.

Term Insurance-Benefits

  • High life insurance cover with affordable premiums: term insurance plans provide a large amount of life insurance coverage with affordable premiums. This cover will compensate for many years of lost incomes.
  • Cover life against serious illnesses: in addition to providing life cover, the new-age term plan like ICICI Pru I protect Smart also offers protection against critical illnesses. For a small additional premium, critical illness cover offers the same amount of payments when the critical illness is first diagnosed, such as heart attack, cancer, kidney failure.
  • Support in case of Disability # #: In New-time plans like ICICI Pru Iprotect Smart, the insurance company pays your future premiums in case of total and permanent disability. As a result, your life insurance coverage will continue even if you are unable to pay the premium.
  • Additional security: Term policy provides additional payments (‘ up to 2 crore) in case of accidental death in order to increase your family’s safety. For example, if your life cover is ‘ 1 crore, the term insurance plan with accident cover will pay ‘ 2 crores to your family if accidental death +.
  • Tax benefits: Term Insurance plans provide tax benefits on premiums paid up to ‘ 46,800 under section 80 C. New-age term plans with critical illness cover will also provide additional tax benefits on premiums paid up to ‘ 7800 under section 80 D. You will also receive tax benefits subject to conditions under section 10 (10 D) of the money available to your family if an unfortunate incident occurs.

How to choose the best term insurance plan?

When buying a term plan, we always have questions about which term plan best and how to compare the best term insurance plan. Here are some parameters to help you choose the best term plan for you:

Case solving ratio: this ratio tells you how many claims are to be made for life insurance as a ratio of claims. If this ratio is higher, it is better.
Fact: ICICI Pru Life has a claim settlement ratio of 98.6%

Solvency ratio: The solvency ratio tells you that if necessary the insurance company you choose will be able to resolve your suit. IRDAI ordered that each life insurance company maintain a solvency ratio of at least 1.5.
Fact: ICICI Pru Life has a solvency ratio of 2.52

Option to add critical illness benefit: critical illness such as cancer or brain surgery will cost a lot of money and will restrain the family economy. A serious illness protects your family from this danger. It will immediately pay for the diagnosis and submit only medical documents confirming the diagnosis.
Fact: Critical illnesses covers are very popular with term insurance schemes. One out of three of our customers also adds critical health cover to their term plan.

Option to add accidental death Benefit +: If you choose for accidental death cover, your family will get an additional payment if they die in danger, subject to a maximum of Rs 2 crore.
Premium Deduction on terminal Illness # #: If a person within the policy is suffering from a terminal illness, his/her future premiums need not be paid.