Why Should Term Insurance Should be the Initial Step in Securing Your Future?

Term insurance today is an imperative investment that a person has to make in order to protect themselves from financial duress in difficult times. The reasons why a person should buy a term insurance plan lie in the benefits and features offered by insurance providers who have created plans and incentives for those striving to plan ahead. 

Buying a comprehensive Term Insurance Plan is a no-brainer given the uncertain nature of life. A prudent person will always look to secure the future of his loved ones after him. A term insurance plan is not that expensive as you may think, it will cost you only a minor chunk of your regular income.

However finding the Best Term Insurance is not grocery shopping, especially when you are new to investment. The number of available options will drive you crazy because not all of them are genuine. To find the right term insurance plan, you’ll have to consider a lot of factors including your family structure, your life stage, family’s lifestyle, and your current income. 

Then you’ll have to estimate your current liabilities while also keeping in mind the liabilities that might arise in future. 

Thus buying a term insurance is not an easy task, make sure you are backed with adequate research before landing with any insurance provider.

Expenses are recurrent and constant; from bills to loans, one has to maintain their financial obligations and also build their savings for future expenses. In the event where the income supporting these expenses is disrupted, one can face great distress and resort to liquidating important assets and savings. A term insurance plan is one that ensures such a situation can be mitigated by offering coverage and monetary benefits at the end of one’s term tenure, which can be used by the policyholder to fulfill their long-term goals or investments. 

Let us further understand in detail why purchasing a term insurance plan should be the initial step towards securing your future:

1. Low Premiums:

There is a range of insurance plans that offer coverage and future benefits to policyholders of all kinds. However, the more complex a plan is, the higher the premiums for them are. Hence, those who are starting out in their professional careers with limited financial agency and insurance knowledge can choose to go for a term insurance plan as their first investment. 

It is a simple instrument that has premiums that can go as low as Rs 600 a month and are accessible to people from all income brackets. 

2. Build Finances:

In order to steadily build one’s finances, there should be a fixed part of the income that is sent directly to savings and insurances. These investments and insurance plans are interdependent on one another as they help build each other. The money sent into these instruments is focused on growing in value over time and also allowing the insured person to fulfil their goals. 

To be able to build a corpus and have a strong investment portfolio, one needs to be secure about things such as their life insurance expenses. The reason for that is that in due course of earning their capital in high-return schemes, one may experience financial losses in the market; hence when a person is insured under a term insurance plan, their losses will not affect their coverage or tenure. 

Build Finances
Build Finances

While investing in market-linked schemes and money instruments, one will not have to compromise on their life insurance requirements as they are increasingly affordable and customizable as per the customer’s needs. 

3. Tax Benefits:

Since lawmakers understand the universality of needing to secure one’s future in the face of unforeseen emergencies; the premiums paid for a term insurance plan and the pay-out sum thus received from the same at the time of maturity is exempted from taxation under Section 80C and 10(10D) of the Income Tax Act, 1961.

Term insurance plans are, therefore, an ideal choice of insurance and investment where the taxpayer can avail a tax deduction of up to Rs. 1, 50,000 from their net taxable income on account of the investment premiums they may have paid. 

4. Long-term Goals:

The most recurring expenses that a person may have in the course of their lifetime are mostly driven towards day-to-day bills and financial liabilities. However, a person may have long-term goals such as education, property investments, marriage, or travel that have to be prepared for well in advance. The pursuit of these goals is something that drives a person or family to build their capital and increase their income.

In the event that a person meets an unfortunate accident or dies before securing an adequate financial corpus to achieve these goals, a term insurance policy and its monetary benefits can be used to fulfil these goals and expenses. It helps the beneficiaries in the face of financial distress while keeping them from having to sacrifice their long-term goals and investments. 

5. Additional Benefits:

A term insurance plan with its variations and abundance of options can be an ideal choice for people who wish to have robust financial visibility for all unforeseen situations that may arise in their life. Therefore, term insurance plans offer additional riders and benefits that can help policyholders prepare for situations that are not limited to death. 

One can add riders for Income, Waived Premiums, Disability, Accidental Death, or even Critical Illness in their existing term insurance plan. The cost of these riders added to the basal premium cost; hence one should choose after adequate deliberation. 

Additional Benefits

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A term insurance plan can be a useful resource and a lifeboat for families undergoing financial distress in the absence of their primary income earner. It is an imperative investment that should be made by those starting their insurance journey, for the tenures are usually ranging from 25 to 30 years, and it can be beneficial to start as early as possible.

In order to know more about the benefits of purchasing a term insurance plan, you can reach out to insurance providers such as Max Life Insurance, who can guide you through the process of term plan comparison and create insurance solutions tailor-made for your needs.