Your Complete Guide To Understand Term Life Insurance

Your Complete Guide To Understand Term Life Insurance

Finding the best term life insurance plan is an impertinent necessity for you to secure the future of your loved ones in your absence. It is a proven fact that the best term plan offers the most value for money. It is the most genuine form of life insurance as it provides financial protection to your family at the most affordable rates.

You can get a large amount of life cover at low premium rates by investing in term life insurance. The benefit amount is paid out to the beneficiary in case of the person insured passes away during the term of the policy. The purpose of this death benefit is to cover the financial security of your family when you are not around them.

Why Should You Invest in Term Life Insurance?

If you are the only earning member of your family, buying term life insurance would take care of the monthly financial needs of your family in your absence. You can also compare health insurance and other insurance policies as well to find a suitable plan for you. It will also help your family members to repay your loans so that they can financially weigh down in your absence. Also, the term plan offers peace of mind to you as the well-being of the financial dependents would be taken care of even in your absence.

A term life insurance plans offer critical illness protection which not only protects your family in case of uncertain eventualities but also during your lifetime. Critical illness benefit provides you with financial security against various health conditions.

How Does a Term Life Insurance Work?

The term plans work like limited life insurance policies. They provide coverage for a specific time. You must pay premiums at regular intervals to enjoy the life cover. If any tragic event happens to you during the policy tenure, your beneficiary receives the promised sum assured as the policy pay-out. You can also choose to purchase riders or add-ons to enhance your family’s financial protection.

Term Life Insurance Work

Benefits of a Term Life Insurance

Term plan provides you with pure life cover. It is a basic plan which makes life insurance more affordable along with other options. It is possible for you to opt for a larger life cover at a lower premium when compared to a similar endowment plan. There are several benefits of investing in term life insurance, here are some of the most important ones.

Death Benefit

A term plan provides financial protection to your family in case of an unfortunate event. It cannot be used as an investment instrument. So, it does not provide any return on the premium you pay in the fortunate event that you survive the policy tenure. One of the best features of term life insurance is that your entire premium goes into securing your insurance cover. Thus, you can get substantial coverage to cover the future expenses of your loved ones.

Riders Benefit

You can attach a rider to the term life insurance policy, thereby enhancing the utility of the policy. So, by opting for a critical illness rider, you are entitled to receive the sum assured on being diagnosed with the critical illness. There are also other riders to choose from like, disability cover, and waiver of premium cover, among others. You should select riders based on your specific needs to make the life cover more suitable and meaningful.

Provides Life Cover

A term plan keeps your family protected from monetary challenges in case of an unfortunate event. It provides live coverage of your choice at affordable premium rates. The cover amount can help your family to avoid compromising their lifestyle in your absence.

Tax Benefits

A term life insurance plan offers many tax benefits under Section 80C of the Income Tax Act. You can claim deductions up to Rs. 1.5 lakhs on the premium you pay for your term plan. The pay-out in the term plan is also tax-exempt under Section 10(10D).


The ideal time to purchase a term life insurance plan is right away. Young individuals who enjoy good health can get a higher sum of assured amounts at affordable premiums since they pose very few risks. As you get older, you may face different health issues that could increase your premium or reduce the maximum sum assured you can get.

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