25.2 C
New York
Monday, June 24, 2024

Buy now

Reasons Why Term Insurance Plan Makes for a Smart Investment

Term insurance provides a sum assured to the policyholder’s beneficiaries in case he/she passes away during the tenure of the plan. Hence, a term insurance plan is a great investment as it can provide financial security to the policyholder’s family.

If you want to know more about the reasons why you should invest in term insurance, then read this article.

More and more people are understanding the value of term insurance. This is because term insurance provides financial protection to the policyholder’s family in case of an unforeseen event. For instance, if the insured person passes away during the tenure of the plan, then the insurer can provide his/her beneficiary with a sum assured. This sum assured can be used to meet regular and future expenses.

Here are some of the reasons why buying term insurance is a good investment-

  • It Can Provide Sum Assured

One of the concerns that every person has is their family’s financial security. In case of a person’s untimely demise, his/her family might face a financial burden. However, a term insurance plan can provide a sum assured to the policyholder’s beneficiaries. Hence, this sum assured can protect the family from financial difficulties.

  • It Can Act as Income Replacement

Term insurance policy is a type of life insurance that offers protection against any financial shortfall that might arise due to a permanent disability or death. The insurance company pays the beneficiaries. This helps in replacing the income of the insured for a specific period.

  • It Provides Tax Benefits

A term insurance plan can lower a person’s tax liability. Premiums paid to purchase term insurance can be claimed as tax deduction under Section 80C up to Rs. 1.5 Lakh.

  • It Helps in Creating a Good Financial Plan

A good financial plan is very important for securing life. A term insurance plan is necessary while creating a financial plan. A term insurance plan is a good investment as it can secure a person and his/her family’s future.

  • Add-Ons

Add-ons are additional benefits that a person can purchase by paying an extra premium. It can provide additional security to the policyholders. Some of the most common add-ons are- disability rider, accidental death rider, critical illness rider, and waiver of premium rider.

  • It Can Help in Building a Corpus

While term insurance provides financial protection, there are some insurance plans that also enable the policyholder to earn returns. Hence, when a person stays invested in an insurance plan for a longer time, he/she can build a corpus that can allow him/her to meet long-term goals.

Term Insurance for Securing Family’s Future

A term insurance plan can provide the policyholder’s family with financial security. Therefore, in case of an unfortunate event, the insured person can protect his/her family against financial problems. Furthermore, the add-ons can enhance security and provide more protection. Hence, adding a term insurance plan to every financial plan is necessary. Thus, it is important for every person to invest in a term insurance policy.