By Bizz Impact
Over the past few years, term insurance has emerged as one of the most practical and widely chosen options in Indian families and among the working youth who seek affordable financial protection. Unlike permanent life insurance plans that blend savings and life coverage, term insurance is designed for pure life protection. It covers the risk of untimely death and provides financial stability to your loved ones. If you are looking for thebest term insurance plan, here is a simple guide to gain insight. What is Term Insurance? Term insurance is a type of life insurance product that provides coverage for a specific period or 鈥渢erm.鈥 If the policyholder passes away during this period, the insurer pays a death benefit to the nominee. However, if the policyholder survives the term, there is no payout, unlike permanent insurance policies that may offer maturity benefits. Being a pure life cover, term plans are generally less expensive than investment-linked insurance policies. They are ideal for individuals who want pure coverage at a minimal premium. Why Term Insurance? There are several reasons why term insurance has become increasingly popular in recent years. High Sum Assured at Low Premiums: One can opt for a high sum assured at a relatively low premium. For example, a 鈧1 crore cover can be quite affordable if bought at a younger age. Flexible Terms of Policy: Most plans allow you to choose the policy term anywhere from 10 to 40 years, depending on what suits your financial requirements. Customisable with Riders: You can complement your term plan with riders such as Accidental Death Benefit, Critical Illness Cover, Waiver of Premium, and even Disability Income Rider for additional cover. Peace of Mind: Providing financial support to your family gives you peace of mind. Tax Benefits You Can Avail Another major benefit of buying a term insurance plan in India is the term insurance tax benefitsavailable under the Income Tax Act. Section 80C Deduction: Premiums paid towards term insurance are eligible for deduction under Section 80C up to 鈧1.5 lakh in a financial year. In simple words, investing in a term plan can reduce your taxable income. Section 10(10D) Benefit: Section 10(10D) provides that the death benefit received by the nominee is tax-free, subject to meeting specific conditions. Section 80D for Riders: Adding a Critical Illness or similar rider to a term plan allows a tax deduction under Section 80D. This is especially useful for those looking for dual protection and tax-saving options. Finding the Best Term Insurance Plan Picking the best term insurance plan depends on several factors, including age, health, income level, and financial responsibility. Check out these tips for guidance: Buy Early: The younger you are when purchasing term insurance, the lower your premiums are going to be. Therefore, it is wise to purchase early and lock in for a longer term. Term Insurance Calculation: Customise your coverage amount, term length, and riders based on your current and future needs. Policy research: Explore policies before committing to one. Compare features, claim settlement ratios, and premiums. Choose a Well-Rated Insurer: Look for insurers with high claim settlement ratios and good customer service ratings. This will make the process easier when your family needs support. Review Your Plan from Time to Time: As your life changes, so will your financial needs. Review your term plan regularly to ensure it remains aligned with your current situation. What People Often Get Wrong About Term Insurance There are some misconceptions that hold people back from purchasing term insurance. Some of them include: 鈥淭here鈥檚 no return on investment.鈥 That is true, but term insurance is designed for pure protection, not profit. 鈥淚t鈥檚 only for married people or parents.鈥 Anyone with financial dependents or liabilities should consider it, including young professionals. 鈥淐laim settlement is always a hassle.鈥 Today, insurers have simplified the process, and many claims are settled quickly if the documentation is in order. Conclusion A term insurance plan is among the simplest and most effective means to secure your loved ones鈥 future. With affordable premiums, comprehensive coverage, and tax advantages, it has become an important part of financial planning for individuals and families in India. Whether you are looking for a more comprehensive term insurance plan or just wondering about term insurance tax benefits, the more informed you are, the better choice you can make. (No Times Now Journalists are involved in creation of this article.)