The fact that a term insurance policy is the most basic type of insurance policy is both its bane and boon. While many people prefer the simplicity of the policy, others talk about the lack of maturity benefits. However, a term insurance policy is truly beneficial in more ways than one, which you will also agree with once you read the article. Go on!
- Affordable premiums but high sum assured
One of the major benefit to calculate term insurance premium is that you can get a good sum assured at affordable premiums. In fact, the premiums for a term plan are a lot more affordable than other types of insurance policies available in India.
- Easier to understand than other policies
A term insurance policy is easier to understand because it is the most basic type of insurance. If nothing else, then all you need to remember is to pay the fixed monthly premium to make sure that the policy does not lapse.
- Multiple payout options for death benefits
The death benefit payout can be customized as per the needs of the family. As such, there are four options in terms of payouts, and they are as follows:
- fixed monthly income
- one-time payments
- regular income and lump sum amount
- increasing monthly income
- Additional riders with the policy
Term insurance policies let you add riders to enhance the policy further and increase the associated benefits. You can add riders like:
- Accidental Death Benefit
- Income Benefit
- Critical Illness Benefit
- Waiver of Premium
- Income tax deductions are available
As per Section 80C, the premiums paid for a term insurance plan get tax exemption up to ₹1.5 lakh. When you add the critical illness rider, you also get tax exemptions under Section 80D. Thus, this policy is a good idea when trying to reduce taxable income.
- The option to receive maturity benefits
One of the main drawbacks of term policies, according to many people, is that they do not come with maturity benefits. However, you can add a rider to solve this issue as well. Simply choose the return of premium rider while applying for the policy, and you will get back all the premiums you paid during the tenure after the policy matures.
- Premiums can be waived off under special circumstances
The policyholder will have to choose a premium waive-off rider. If the policyholder faces a loss of income due to a critical illness or permanent disability, then all the pending premiums are waived off by the insurance company.
Parting note
Thus, there is more than one reason for you to consider a term insurance policy. The best part is that you can apply for the policy online. So, what are you waiting for?
Click here to know more about Kotak Term Insurance Plan: https://www.kotaklife.com/online-plans/online-term-insurance-plans
