An increment is a well-deserved milestone for salaried professionals. Your hard work is recognized in the form of a performance bonus and this extra money earned can open up a world of possibilities. You might be tempted to spend this amount on a holiday or a new car, but a smart decision might be to invest it for the financial security of your loved ones. The majority of your bonus should be directed towards an investment option, which will secure the future of your loved ones. A term plan is a good option for you to consider.
What is term insurance?
A term plan is an investment product that will provide financial protection to the family in case something unfortunate happens to you. It does not have a maturity payout but the insurance company will pay the sum assured in case of an untoward incident. The insurance will cover you against the risk of untimely death for a specific period. Moreover, when it comes to the cost aspect, you can buy an online term insurance policy at an economical monthly premium.
Reasons to buy term insurance
If you are wondering why buy term insurance, consider the below-mentioned reasons for the same.
- Affordable premium
You can enjoy a high sum assured amount at an affordable premium. If you buy term insurance of INR 1 crore at the age of 30, you will have to pay a monthly premium below INR 800 for 30 years. The premiums are affordable and you will be able to enjoy a high cover without paying a huge amount.
- Tax benefits
If you are thinking ‘’should I buy term insurance’’, you need to understand that a term insurance plan will make you eligible for tax benefits under Section 80C and Section 10 (10D) of the Income Tax Act, 1961. The premium up to INR 1.5 lakh is tax-exempt under Section 80C while the death benefit is exempt under Section 10 (10D).
- Peace of mind
Term insurance is a safety net for your family. The plan assures that the financial security of your family is protected in case something unfortunate happens to you.
- Helps to handle expenses and debt
You are the breadwinner of the family and your family is dependent on you for monthly expenses. In case of any untoward incident, your family will be in trouble and will find it difficult to maintain their lifestyle. With a term insurance plan, you give your family members the capability to fulfill the monetary obligations even in your absence. The plan will help to pay off any debt and meet their financial goals.
- Purchasing at a younger age costs less
If you are wondering, why buy term life insurance now, you need to remember that the sooner you buy, the better it is for you. You will get a suitable plan at a lower premium when you are young as the health risks associated with you are lesser during this phase of life.
Never overlook the importance of a term plan. It will relieve you from any mental stress and keep your loved ones financially secure when you are not present with them.