What is Term Insurance?
Term insurance also known as term life insurance allows an investor to have financial coverage on their life, for a certain period of time. Even though the premium they pay is not high, they have a significant cover on their life, if they die during within the term of the insurance plan. This benefit is paid to a beneficiary chosen previously by theinsured person.
Term insurance offers only cover, without any other profits. Since there is no savings component, you do not need to pay ahuge sum of money as premium. Only a small sum at regular periods of time needs to be paid to retain this cover for the duration of the term.
Why term insurance is your best choice?
Large cover: As a young person, the chances of one’s death are fairly low, therefore, the premium they pay is also fairly low.As a 25- or 30-year-old, one cannot visualize being able to provide their beneficiaries support in the form of Rs 1 crore only through their savings, investments and assets in caseof their death.Therefore, by paying low premiums andinvesting more, they are able tooffer some financial relief to their family even after their loss.
Add-ons: Additional plans can be added on to your original term insurance plans depending upon your situation and conditions in life. Some of the other common covers are terminal illness, employment and disability.By adding these covers, you receive the cover amount, if you are in the situation specified by the cover. However, with the addition of covers the premium as well as the terms and conditions might increase.
Tax benefits: The amount paid as cover through this cover, is exempt from income tax.
If you are still doubtful about getting a term insurance, contact our team at Daily Finserv, so that you can get all your questions answered to make an informed decision.
