Life insurance has undergone a major transformation in recent years, with policies now being more tailor-made to satisfy modern consumers’ needs. Given that there are so many types of term insurance policies, deciding what type and level of coverage you need can be difficult.
Most people start with an analysis of prices when choosing a term plan. However, it is important to keep in mind that it can compromise your family’s financial security to give too much importance to price. As a consumer, you expect something secure from your term insurance plan. Things you should expect from your term insurance plan are mentioned and explained in this guide.
What Is Term Insurance?
If the insured person dies during the specified period, term life insurance provides for the payment of a predetermined death benefit. Life term insurance ensures that if you die within a given period, your beneficiaries will receive the declared death benefit. As opposed to a whole life insurance product, term life insurance products offer only guaranteed death benefits and do not contain any investment or savings component.
A good proportion of the premiums paid for the term plan are paid as maturity benefits by term insurance plans with a return of premium component. The amount of the term life insurance premium is calculated according to a person’s age, general health status, and lifetime expectancy.
Things To Expect From Term Insurance Plan
The following are the six best expectations that you should have for your term plan.
- Adequate financial protection for your family
After considering how much income your family would require in the event of your untimely death, you should decide on the amount of a term life insurance policy. Considerations should be made for a variety of things, including your family’s monthly spending, loans, liabilities, inflation, important life goals like marriage or higher education, and retirement.
- Prompt customer service
Customer satisfaction should be a major focus for any insurance company. The process will be fast and easy for you if the customer support team is in charge. In addition, you should look for benefits such as a fast service online channel where you can download policy documents at any time, get quick quotes, renew your policy when it expires, track your investment premium online, or make a claim.
- It is easy to fit into your monthly budget
The affordability of life insurance policies is one of the main reasons for saving on term insurance. This is an efficient way to ensure your family’s financial security. As there is no investment or saving component in term insurance and the full premium is used to meet the risk, premiums for term insurance policies are the lowest among all types of life insurance.
- Non-stressful settlements
In your absence, a proper term insurance plan can help make the future simpler for you and your family. But when buying a term plan, you must provide all your information correctly. The rejection of the claim may result in incorrect or misleading information being submitted, which will lead to unnecessary difficulties for your candidates.
- Tax advantages
Term insurance and tax advantages are always related. According to Section 80C of the Income Tax Act of 1961, premiums for all life insurance policies are tax-exempt up to Rs. 1.5 lakhs. Section 10(10D) of the Act exempts your beneficiary from paying taxes on the claim amount they receive. Furthermore, if you bought a health-based rider along with your term plan, you may be eligible for an extra tax deduction under Section 80 D of the Act for the premiums paid for the rider.
- A wide range of additional riders and features
Riders provide more value in a standard term plan. They are not included in a single plan, so you will have to buy them separately from the term plan.
One such provider of term insurance is Aditya Birla Sun Life Insurance Term Plan, which offers distinctive and adaptable riders. Term life insurance also offers additional risk coverage for things like disability, hospitalization, critical illness, terminal illness, etc., in addition to the opportunity to receive benefits from partial lump sums, some as income for a specified period, or discounted future payments. You should choose your riders with consideration for your needs and way of life.
There is variation in the benefits of term insurance. When you’re not there, you can think of term life insurance as a long-term contract between you and your insurer, which will benefit your family greatly. Considering all the factors mentioned above in this article, it is best that you decide on your own or your family’s choice of a suitable plan.